Mr Pezzullo: Thank you, Chair. I should like to address the issue of corruption in the Australian Customs and Border Protection Service in this opening statement. The committee should expect more arrests of Customs and Border Protection officers as a result of ongoing investigations which I will summarise in a moment.

I wish to say at the outset that this is a matter of profound regret and disappointment to me and the vast majority of our officers. Before going into a degree of necessarily limited detail on these matters, I should first like to acknowledge the silent majority of the service—those who put on the uniform every day to protect our nation from harm coming across our borders. I would like to recognise the work of more than 5,000 hardworking and committed officers of the service, the vast majority of whom have done nothing wrong and are grievously tarnished by allegations of corruption. They have no voice in the public debate but mine, and I speak for them in saying that like me they are committed to stamping out this alleged behaviour and building a Customs and Border Protection Service in which the Australian community can place its trust.

On 20 December last year, the Minister for Home Affairs, the Commissioner of the Australian Federal Police and I announced the results of an investigation into corruption and criminal conduct at Sydney international airport, including, regrettably, by a number of Customs and Border Protection officers. This investigation is ongoing, and I expect to have more to say about it when this committee next meets. What I can say at this stage is that two former Customs and Border Protection officers, both of whom were working at Sydney international airport at the time of their arrests, are facing criminal charges. One has entered a guilty plea and has been committed for sentencing. Neither person is now an officer of the service. The charges involved include conspiracy to import a commercial quantity of border controlled drug precursors, abuse of public office and receiving a bribe. These are very serious matters. As senators would appreciate, I cannot comment on the specific matters which have been alleged and are now before the courts. I am also restricted by the ongoing investigations as to how much detail I can provide to this committee.

What I can say is that this matter is ongoing. Further arrests will be made, including, as I said earlier, of other Customs and Border Protection officers. Separate from criminal proceedings, disciplinary proceedings have been initiated against a number of officers. This committee can be assured that the service is committed to securing our borders and taking strong, resolute and urgent action to deal with those amongst us who have not upheld the required standards. The key focus at the moment is to track down each and every officer who has been involved in corruption, criminal behaviour and/or professional misconduct and to deal with them, whether under the criminal law, the service's provisions for dealing with breaches of the Australian Public Service Code of Conduct or both.

I was briefed on this investigation in early September 2012 when I took over as the interim chief executive officer after the retirement of the former CEO, Mr Michael Carmody. The activity in question had been detected in 2010 and referred to the Australian Commission for Law Enforcement Integrity, or ACLEI, in January 2011, as soon as the service came under its jurisdiction. ACLEI has the powers of a standing royal commission, and its role has been pivotal in the resolution of this matter. I wish to recognise the close collaboration that the service has enjoyed with ACLEI and the Australian Federal Police in this joint investigation.

Customs and Border Protection has been alert to the risk of corruption and criminal infiltration for a number of years. We have appreciated the risk that criminal groups will attempt to infiltrate the service so as to gain access to sensitive information or even active support for the smuggling of illegal, prohibited or regulated goods. With that in mind, I would like to take this opportunity to provide the committee with a brief overview of our progress in recent years to harden the service against the potential for corruption and criminal infiltration.

The service first established an Internal Affairs Unit in 1979. In 2009, the service established the Integrity and Professional Standards Branch, with responsibility for functions such as fraud control, security—including personnel security and vetting—and employment suitability checks. From around five staff in the former Internal Affairs Unit, more than 40 staff now work in the Integrity and Professional Standards Branch.

Corrupt officers will always seek to avoid systems and processes. Those systems and processes need to be continually enhanced and improved. To that end, legislation was passed last year to provide the service with stronger corruption-fighting powers, building on reforms that had been progressively pursued since 2009. These additional powers, all of which will be in place by this Friday, 15 February 2013, are as follows: the provisions for the integrity testing of Customs and Border Protection officers, the power of the CEO to make a declaration that an officer's employment has been terminated as a result of serious misconduct, mandatory reporting requirements under which officers will be required to report misconduct or corrupt or criminal activity, and drug and alcohol testing for all Customs and Border Protection officers.

I am fully committed in my role as the acting CEO to use these powers to their fullest extent to harden our service against the threat of criminal infiltration and corruption.

To ensure that we learn quickly from what has allegedly occurred at Sydney international airport, work is already underway to address the problems identified during the investigation. This includes but is not limited to increased education of our airport operations staff in relation to the threat of criminal infiltration and corruption; increased job rotation for airport staff; leadership training for middle managers and supervisors; reviewing how rosters and task deployments are being managed at the airport; and the commencement of a longer term effort to reshape the workplace culture in our airport operations branches. These initiatives will have more general application across the service in the days, weeks and months ahead.

Since September, we have also reminded all staff of their obligations to report misconduct and suspected instances of corruption. These and other changes in governance, oversight, processes and procedures will be necessary and important measures and will be rolled out in the weeks and months to come. They will not, however, be sufficient if they do not tackle deeper workforce issues where more needs to be done. The Customs Reform Board announced by the Minister for Home Affairs in December last year will help us to consider more enduring measures in this area. I had the privilege of meeting with the board members earlier this month, when I was able to reiterate our strong and unequivocal commitment as a service to work with the board to make this happen. I very much look forward to working with Justice James Wood and his fellow board members. While not wishing to limit the discussion or indeed the ability of the board to make recommendations to the minister as it sees fit, we will need to consider a wide-ranging program of reform, especially in the area of the service's operating model and its workplace culture. Ultimately, we will have to reset the service's operating model and its workface capability and culture through enhanced recruitment and career management processes, improved leadership and professional development programs at all levels and an improved enforcement agency culture to reflect the reality that much of our work is in fact that of a disciplined uniformed service.

In the interim, I will be pursuing an early focus on the following three areas. Firstly, I will be further expanding the remit of the professional standards branch that I mentioned earlier such that it directly manages all disciplinary processes undertaken under the provisions of the APS Code of Conduct. This will give us a more integrated approach to managing professional conduct in our workplaces, fighting corruption and criminal infiltration and dealing with misconduct. Secondly, I intend to enhance organisational suitability checking with a view to making it one of the toughest regimes in the public sector, especially when it comes to detecting and dealing with officers with criminal associations. Thirdly, I intend to crack down on the breeding ground for potential serious misconduct and corruption, in areas such as poor appearance and presentation; the negligent performance of duties; unauthorised absenteeism; the performance of duties under the influence of alcohol or drugs or both; the use of illicit substances whilst off duty; undeclared outside employment; and insubordination—for instance, by refusal to follow lawful and reasonable directions.

In concluding, I wish to again salute the silent majority of the service, those who are at this very moment keeping our borders open to legitimate trade and travel while ever watchfully standing guard on the ramparts of the nation, securing the community from the harms that our adversaries would seek to move across our borders. I say to them through this statement: please stand fast and continue to do your duty, because your nation depends on you. I expect to have more to say to the committee on these matters at future hearings. I look forward to your questions.

CHAIR: Thank you. We are going to go to Senator Xenophon first.

Senator XENOPHON: Madam Chair, would Mr Pezzullo be able to provide a copy of that statement for committee members? It is a very important statement and it would be good to have a copy of that now, or sooner rather than later.

CHAIR: I am sure he would.

Mr Pezzullo: Yes.

Senator XENOPHON: Mr Pezzullo, while we are waiting for your statement to be copied and distributed to committee members, I will continue. Back in 2003, former Customs officer Allan Kessing wrote two reports which were widely reported in the Australian. He was dragged through the courts and convicted, and it effectively ruined his life. Through my office, Mr Kessing has indicated his willingness to appear before the Customs Reform Board to assist them with the work that he did almost a decade ago. Do you think it would be a good idea for Mr Kessing, given the reports he has previously written, to assist the Customs Reform Board?

Mr Pezzullo: I might answer that question in two parts. First of all, I make the point that the Attorney-General's Department is responsible for directly supporting the board, so I might see if the secretary—

Mr Pezzullo: wishes to add anything to my remarks. I am not going to dodge the question, but I just make that point. The secretary may wish to add to these remarks. I have got no particular insight into what Mr Kessing may or may not have written at the time. I have read his report, some years ago—when I first joined the service, in 2009. I think any member of the public, any concerned citizen, who has got something to say to the board should be able to say it to the board.

Senator XENOPHON: He goes a bit beyond being a member of the public, though, doesn't he?

Mr Pezzullo: Yes. I understand that, but at the moment he has the status of a private citizen.

Senator XENOPHON: Minister, is the government proposing to release the Kessing reports now, given what has occurred in recent months?

Senator Ludwig: I will seek a view on that. I suspect the position will remain the same as it always has been, but if there is any change to that I will advise you accordingly.

Senator XENOPHON: Sure. Mr Pezzullo, I have a number of questions and limited time. I am aware that matters are before the courts and therefore I will be asking you questions of process and protocols within Customs—what has happened in the past and what will be happening. But, insofar as I must refer to what has occurred previously, it is to give context in relation to the questions I wish to ask you. I note from media reports that one of the alleged key players who has been charged in this scandal, a Customs officer, was arrested in 2008 by New South Wales police for having a number of bags of cocaine in his car. He admitted that he was a user. My understanding is that when he went to the courts on those charges there were a number of Customs officers who attended at the court to give him support. This man continued to work at Customs for another 3½ or four years. How on earth did that happen? Firstly, isn't there an obligation on the part of law enforcement agencies at a state and federal level to exchange information? Secondly, if a Customs officer is charged and has admitted to an offence of being a user of an illicit substance such as cocaine, is it appropriate that they continue working in border security?

Mr Pezzullo: I might answer that question first of all at a general level. I will start, if I may, with the latter part of your question: not on my watch. Indeed, with respect to the ability to issue CEO orders that comes into effect this coming Friday, I will be issuing relevant orders in respect of professional conduct. As far as I am concerned, the one thing that a border guard cannot do is partake of or indulge in the very illicit substances that they are meant to be protecting the community from.

Senator XENOPHON: So, Mr Pezzullo, that means that under your watch, with the new powers that you will have as of this Friday, if someone is charged with an offence of possession—

Mr Pezzullo: I am not going to speak to hypotheticals but, at a general level of policy, the procedure would be, once that matter came to our attention—and I will come to the New South Wales police matter in a moment—either through reference from another law enforcement agency or, critically—what did not exist at the time you are referring to, mid-2009, our coverage that now exists under ACLEI—a reference from ACLEI, the Australian Commission for Law Enforcement Integrity, or by whatever means it came to our attention, in those circumstances, as a general matter of policy—and I do not wish to bind future decision makers in each and every case, because every case has to be determined on its merits—the general policy would be that the officer would be suspended pending a code of conduct investigation to determine whether a breach of the code of conduct had occurred, and then a separate delegate would make a decision around sanctions should a breach have been found. So that would be a standard application of the code of conduct process.

The only caveat I would make in saying that is: if the matter comes to us—as is actually before us at the moment—pursuant to a criminal investigation, where the Federal Police or the Commission for Law Enforcement Integrity have an interest, we have the discretion to stay those code proceedings until the criminal matter is looked at, and then we can revert to those code proceedings in due course.

Senator XENOPHON: So the short answer is: if one of your Customs officers has been charged with possession of an illegal substance, they will be suspended?

Mr Pezzullo: And then if they are found guilty that would weigh on the decision maker in terms of their future status.

Senator XENOPHON: How is it that the New South Wales police did not communicate with Customs following the arrest of this person and this person continued to be in border security, border control?

Mr Pezzullo: The short answer to your question is that the trial in question, which occurred in the Burwood Local Court, occurred in June 2009, literally the month before I joined the service, so I have no idea, but I will take it—

Mr Pezzullo: He was actually arrested in early 2009 and he appeared in court on 17 June 2009. The short answer to your question is: I have no idea. If there is anything I can usefully come back to you with, I will.

Senator XENOPHON: All right. I accept you do not have any idea in relation to what occurred previously.

Mr Pezzullo: About why the New South Wales police did not think it appropriate to advise us.

Senator XENOPHON: Yes. But now how can we be assured that, if any state police service arrests one of your officers on charges relating to corruption, dishonesty, or illicit drug use, you will know? How do you know that you will in fact know that that is what has occurred?

Mr Pezzullo: I think we have achieved a greater level of assurance since that time. I said in my statement that since about mid-2009 a series of reforms have been progressively put in place to transform what was a very small and, frankly, fairly stretched internal affairs unit to grow into a larger capability—the professional standards branch. I will come to the point immediately. As part of that process, an integrity network has been established between the professional standards branch; now ACLEI, because we are under their jurisdiction; the professional standards part of the Federal Police; and state police forces. I do not have an absolute guarantee, and I am not going to give you a false absolute guarantee, but I have a high level of assurance that, were that to occur now, four years later—and there are instances that I have in the front of my mind where this is occurring—state, territory and other law enforcement agencies would advise us and say: 'You guys have got a problem in respect of officer X, because we've just picked him or her up and we're dealing with them.' I cannot give you an absolute guarantee—

Senator XENOPHON: Hold on, Mr Pezzullo. So you are telling me that there is no guarantee at this stage that, if a Customs officer is picked up by a state police force, it would necessarily get through to you at Customs?

Mr Pezzullo: I have a higher level of confidence because there is a formal network that has been now set up between the various professional standards parts of the different law enforcement agencies that did not exist in mid-2009, and I have a very high level of assurance in relation to federal agencies because of the close relationship we have with the Federal Police professional standards and with ACLEI.

Senator XENOPHON: I understand that but, in reality, if someone has been caught for an offence of dishonesty or theft or fraud or drug use—or even trafficking, for that matter—the state police would normally be the first port of call.

Mr Pezzullo: In the first instance, that is right.

Senator XENOPHON: Can you, on notice, provide me with the details of those protocols?

Mr Pezzullo: Yes.

Senator XENOPHON: Are you saying that there is still no guarantee that state police forces will know—

Mr Pezzullo: I have got a high level of assurance. I do not want to give this committee a false sense of certainty.

Senator XENOPHON: But if they ask, 'What's your job?' and the officer says 'Security guard', because they moonlight as a security guard, there is no way of that trickling through to you, is there?

Mr Pezzullo: You should not underestimate the ability of the first-instance investigators to get behind someone's employment status. I have a higher level of confidence than I would have had in mid-2009 that that would be referred to us. Secondly, on Friday, when the powers that I referred to earlier come into effect, post commencement there will be an obligation—a clear and unambiguous obligation—on officers to self report. In the case that I think you alluded to, where a number of officers attended court to provide moral or other support to the officer, they would be under a positive obligation to report it, and they themselves would face serious consequences if they did not.

Senator XENOPHON: Because of the fact that they did not at that time, will those officers now face serious consequences retrospectively or not?

Mr Pezzullo: I do not wish to comment on that, because there are some ongoing disciplinary proceedings that are connected with or have a degree of nexus with the joint investigation.

Senator XENOPHON: Just finally on that, because I want to ask two or three more questions, because I know my time is—

Mr Pezzullo: Sorry, Senator; I am not ruling it out; I just do not want to comment in detail.

Senator XENOPHON: But is there any protocol in place? Is there a shared database with state police forces so that, if a Customs officer is picked up and they have not disclosed to the state police that they are a Customs officer, that would automatically be flagged? That seems to be a sure-fire—

Mr Pezzullo: I will wrap the response to that in the answer to the question I have taken on notice as to whether there are databases or IT based systems or whether there are—

Mr Pezzullo: I will check and I will come back in the question I have taken on notice.

Senator XENOPHON: Your internal affairs unit, your integrity and professional standards branch, wrote similar reports in 2007, 2008 and 2009. Again, that was not on your watch, but do you consider it unsatisfactory that those reports were not acted on earlier?

Mr Pezzullo: I think the premise of the question needs to be examined. When you say 'were not acted upon', I do not think that actually stands scrutiny. Whether they were acted upon quickly, comprehensively or at full pace is a different question, but to say that they were not acted upon is—

Senator XENOPHON: Okay; are you satisfied with the pace and the extent to which those reports were acted upon?

Mr Pezzullo: To the extent that we are continuing to put in place reforms—I have announced this morning that further reforms will be put in place around employment checks, organisational suitability—that suggests that it is a never-ending struggle and you have got to keep shoring up your defences against our adversaries, who are both potent and quite savvy.

Senator XENOPHON: Finally—and I am sorry that I have to ask this, because you cannot choose your relatives—insofar as there have been media reports that there is someone that is related to you that is a person of interest, how is that dealt with? How are those sorts of issues dealt with? Obviously it is a matter that you cannot be directly involved with, understandably—and, again, you cannot choose your relatives—but how is that being dealt with from a protocol point of view so that there is public confidence?

Mr Wilkins: It might be better if I answered that question, in the first instance anyway. You may have some other issues. As soon as that came to note, it is fair to say that the government looked at this issue. The minister looked at this issue. We have talked to the ACLEI about this issue. Clearly, as Mr Pezzullo said, he is going to have significant powers and responsibilities coming on board in the near future, so there are potential issues or maybe appearances of conflict, or actual conflict. It is fair to say that he and I have been talking about how the those—

Mr Wilkins: No, no, but to your point: he has a prominent position—he is the acting CEO of the Customs service—so he and I have had discussions about the nature of a possible conflict or appearance of conflict if that were to arise. It is fair to say that we are in the process of sorting out protocols for dealing with that type of situation.

Mr Wilkins: They are being sorted out as we speak. There are powers which the commissioner will have under the new legislation and we will need to figure out a way in which they will be exercised by someone else if issues arise. Let me put it that way.

Mr Wilkins: I think the better idea is that I provide you, Senator, with a briefing on it.

Senator XENOPHON: I would appreciate that, but do you think that the protocols ought to be public, as a general principle, so that there is confidence in the protocols in place?

Mr Wilkins: I do not know that the protocols should be public, actually. What I am trying to do is give you an assurance that we understand the issue, that we are alive to it and we are dealing with it. I am not sure that it is operationally intelligent to actually put the protocols out there.

Senator XENOPHON: Sure. Mr Pezzullo, I am not in any way impugning your integrity. I just want to make that absolutely clear. I just wondered what the protocols are.

Mr Wilkins: And ACLEI certainly made that clear in its reports to government—that there is no basis on which to impugn Mr Pezzullo's integrity.

Senator XENOPHON: I accept that fully, but I think that the issue of the protocols is important in this case. Madam Chair, thank you for your time.

CHAIR: Senator Humphries, you are going next.

Senator HUMPHRIES: I want to follow up a couple of issues from your opening statement, Mr Pezzullo. You referred to the measures that have been taken to deal with the investigation that the minister and the Commissioner of the AFP announced the results of in December.

You talked about the measures that have been implemented and others that are being focused on through the Wood board. You made reference in your opening statement to measures that need to be implemented but that will not be sufficient if they do not tackle deeper workforce issues. Are you suggesting that there are systemic issues that need to be identified here, as opposed to just identifying and weeding out a few bad apples?

Mr Pezzullo: No, I am not quite saying it in those terms. What I am saying is that there is a nexus of sorts between the operating model that we have, particularly around issues to do with rotation, tenure and ongoing suitability checks—perhaps, after a person has been granted a base level clearance, for instance, how we check on matters that come to our attention in terms of criminal associations that might not have been apparent when an officer first joined the service. There are a series of checks and balances that need to be put in place. They will be done quickly. Some of those issues are around things like rotation, tenure and moving people around both to keep them fresh and having that edge in their professional outlook and skill level and to break up any potential groupings that might decide, through whatever process, to engage in this kind of behaviour. That needs to be tackled less at the level of straight integrity and professional standards measures and more at the level of employment policy and how we are functionally structured and arranged.

Senator RONALDSON: What is that nexus, Mr Pezzullo? You were just about to say that there was a nexus between the operational model—you did not finish that sentence.

Mr Pezzullo: I thought I had, but my apologies if perhaps I did not. What I said is that there are some elements of our operating model that have come to light in the events in the alleged behaviour at Sydney airport that really relate, in some instances at least, to the choices and opportunities available to people who are going to take advantage of their position. They relate to how we move people around and how we revalidate their skills and their aptitude for their task. That is less about liaison with ACLEI, liaison with the Federal Police or, as Senator Xenophon was pursuing, liaison with state police services. It is actually just about ordinary, straightforward management: how you are arranged, how you deploy your staff, who makes decisions about their mobility, who makes decisions about their rotation, how you keep their edge up.

My contention is that the majority of our staff—not all of them, but particularly those who work outside Canberra—work in what I described in my statement as a disciplined uniformed service. Our service over time needs to more simulate, look like or have the characteristics of a disciplined uniformed service, which is more akin to emergency services, policing and the military services than to a straightforward public sector agency such as you would find if you lived and bumped into public servants here in Canberra.

Senator HUMPHRIES: Has organised crime, in your view, obtained a toehold in this organisation? Is there evidence of people who have connections with organised crime within the Customs service?

Mr Pezzullo: Just referring to nothing more than the statement of facts and matters that have been alleged in public criminal hearings: the conspiracies involved in the importation events involved activity not just between Customs officers but between Customs officers and outside associates who themselves are engaged in criminal activity. Whether they meet the definition of serious and organised crime or organised criminality or whether they are opportunistic, I do not want to go to, per se. That is a matter for the Federal Police, essentially, to pursue. You asked whether organised crime has a toehold. Certainly some criminal elements have been associating with some of our officers in a manner that is unacceptable, and those officers are being dealt with.

Senator HUMPHRIES: But you do not hold fears about a significant problem with a culture that tolerates or even encourages that kind of infiltration?

Mr Pezzullo: No. Partly going back to my response to Senator Ronaldson, I do not think that the culture tolerates an association or an affinity with organised criminal groups. In fact, the vast majority of officers I see as I move around our work sites get a positive psychic benefit from their role of stopping drugs. They actually get, if you like, a sense of personal reward and satisfaction in finding narcotics, finding steroids, finding daggers, knives and all the rest of it, so they have a positive disposition to protect the community. In fact most of them, the vast majority who have shared their thoughts with me, frankly are disgusted and dismayed at the behaviour of what appears to be a small number of people.

What I was referring to in my answer to Senator Ronaldson was not around a culture that is, if you like, penetrated by or has an affinity with criminal associations; it is more about how we are organised. I am going to use this term to highlight the dichotomy. I do not mean to in any way impugn public servants; I have been one for 27 years. Is it an organisation that is organised, if you like, on a Public Service bureaucratic model, which some of our functions need to be, or is it organised as a disciplined uniformed service, which we have some appearance of?

In responding to Senator Ronaldson, I was not really talking about a systemic culture that goes to an affinity with criminals; far from it. I think most of our people, over 5,000 hardworking, committed people, have an affinity with the opposite. They tell me constantly how much satisfaction they get out of doing field work, finding the drugs, stopping the importations. That is a preface to the next sentence, which is, 'Can you get all the paperwork and red tape off my desk?' and I am working on that as well. So I think they have a positive disposition to protect our community. I need to help them by basically reorganising our operating model so they can do more of that work and less of the work that, frankly, does not add a lot of value.

Senator HUMPHRIES: You talk about cracking down on the breeding ground for potential serious misconduct and corruption, poor appearance and presentation, the negligent performance of duties, unauthorised absenteeism, and the performance of duties under the influence of alcohol or drugs. That would suggest a morale problem across the service.

Mr Pezzullo: No, it would suggest that there are pockets of that behaviour. It will be stamped out. There will not be any tolerance for those issues. Whether that then leads naturally to an affinity or an association with criminal elements and then ultimately a conspiracy to do the very thing that we are meant to be protecting the community from—I am not saying it is pervasive. It has happened in a couple of cases, and there will be other cases that come to light in the very near future which I alluded to at the start of my statement. I think our morale generally speaking, except for the fact that people are dismayed and disgusted at this behaviour, is otherwise very positive when you allow officers to do what they love doing, which is being in the field, protecting our borders both maritime and land based and stopping this stuff from coming into Australia.

Senator HUMPHRIES: Could I ask you about the announcement last week regarding performance-enhancing drugs being used extensively in Australian sport. Could I particularly ask you what Customs' view of the Australian Crime Commission's report Organised crime and drugs in sport would be.

Mr Pezzullo: To start at the top, I am a member of the Crime Commission board. I have access to all of its classified work. My officers work in partnership every day. There would not be a day that passes without exchanges of intelligence information. We of course hold key data that the ACC very strongly relies on, trade data in particular but also passenger movement and seizure data and the like. I would have to check exactly when our involvement started on this particular report, but I can advise you that we have been involved in assisting the ACC with the preparation of the report. Indeed, as an ACC board member, I received the classified version of the report that has been referred to shortly before the launch of the public version. But, as to which analyst did what when and how we undertook that liaison, I would have to just get some more details for you.

Senator HUMPHRIES: On page 12 of that report, it notes that there has been an increase in border seizures of performance- and image-enhancing drugs—for example, a 106 per cent increase from 2009-10 to 2010-11 in performance-enhancing-drug seizures, a 255 per cent increase over the same period in hormones seized and so on. Given the increase in seizures, it is reasonable to suppose, isn't it, that there has been an increase in illegal importation activity? Generally speaking, if you are seeing more being seized, more is coming, trying to permeate the borders.

Mr Pezzullo: That is a reasonable apparent interpretation. We need to be a little bit careful. What I have found in the 3½ years I have been in this game is that, if you go looking for it, your profiles improve, your intelligence leads improve in all of the vectors of goods coming into Australia—sea, air cargo, airfreight, through the mail et cetera. If you go looking for it with better intelligence you find more. It does not always necessary imply—although sometimes it does—that there is an escalation in the absolute quantities that are being effectively smuggled in. It could mean that, but it might not mean that as well. It is a function of how good your intelligence systems are and, without going into a lot of operational detail, how good your profiles are. The better your profiles the higher the probability that you will find stuff.

Senator HUMPHRIES: I understand that, but in your capacity as a member of the ACC, do you think there has been an increase in the size of the market in Australia for these sorts of drugs?

Mr Pezzullo: I would not care to comment. That is really a matter for the Crime Commission as the lead agency in this field. My responsibilities are really limited to assisting them with providing support about what we are seeing at the border rather than the size of the market, which is a linked but different order question.

Senator HUMPHRIES: Have Customs increased the resources they are devoting to intercepting the sorts of drugs?

Mr Pezzullo: I might have to check with a colleague on whether there are more dedicated analysts working on it. The way the profiling system works—and again I do not want to go into a lot of detail because, frankly, I do not want to give our adversaries too much insight into how we do it—is that a lot of this is automated. So what has probably occurred here—and I will take advice if I get this slightly wrong—is that what is called our target development process has become refined—we know what we are looking for. That requires a degree of human intervention at the level of the analyst and they load profiles into our profiling system. Whether there has been a steep increase in the number of analysts working on the problem or whether we have just uploaded better profiles and those analysts are now working on other problems I just do not know—I will have to take advice.

Senator HUMPHRIES: What was Custom's role in the investigation conducted by the ACC with respect to those drugs?

Mr Pezzullo:It almost certainly would have been—and Ms Dorrington will correct me; I do not want to get this wrong—in relation to providing intelligence support, data support, going into our datasets and manipulating data to find patterns and running algorithms through the data. The ACC, as you know, has quite extensive powers. They employ those powers as they see fit. In this kind of project that they undertake, we would provide principally intelligence support .

Senator HUMPHRIES: In the prosecution you mentioned against the two officers, you did not make reference to details of the sorts of drugs that they were charged with importing, but have any Customs staff been implicated in the illegal importation of specifically performance or image enhancing drugs that might be used in sport?

Mr Pezzullo: My preference would be to answer it this way. I have had the matter actively checked both the Crime Commission and with ACLEI. Nothing in the work the Crime Commission it was linked in any way, as I am advised, to potentially corrupt behaviour by our officers.

Senator RONALDSON: I gather there were some allegations about the attendance of a crime at a Customs Christmas party. You indicated to Fairfax that officers who knew about such activities and did not report it could face termination or other disciplinary measures. Are you able to say who the alleged crime figure was?

Mr Pezzullo: I would prefer not to. That matter is the subject of both ongoing criminal investigation and potential disciplinary in investigation and reviews.

Senator RONALDSON: Are you able to say who was responsible for the invitation to this person?

Mr Pezzullo: No and any information coming to us through the criminal investigation which is being jointly pursued by the Federal Police and ACLEI there is a standard process by which relevant material is able to be referred to the agency need for disciplinary action. We are in the process though, until the matter is concluded, I would prefer not to provide this committee with any definitive statements about it.

Senator RONALDSON: I presume that you now know who these Customs officers were who were attending that party. I presume you now know who extended the invitation. Have those officers been dismissed as a result of the evidence that you have regarding an invitation being extended to a crime figure?

Mr Pezzullo: Some of those officers have been dealt with through other proceedings, where potentially there will be far more serious consequences that they will face for their actions. There is a careful process of synchronising between the Federal Police, ACLEI and ourselves on who deals with what matter first under criminal proceedings. The arrests last year are an example of that. In a synchronised way the disciplinary action is either initiated and stayed for a period of time while the criminal matters are dealt with or vice versa.

Mr Pezzullo: Senator, I would rather not be too precise about that, because in some cases active decisions have been made to keep some officers in place pursuant to the interests of the criminal investigation, but beyond that I would not want to be drawn.

Senator RONALDSON: I understand that but, with the greatest respect, I would have thought that the community is entitled to know what has happened to people who had invited a crime figure to a Customs Christmas party.

Mr Pezzullo: I understand that, Senator.

Senator RONALDSON: Let me finish. On the back of everything else that has happened, I think the community would be pretty concerned if those officers who have been identified had not been stood down pending the investigation. If they haven't been stood down, why haven't they been stood down?

Mr Pezzullo: My apologies for interrupting, Senator. Perhaps the best way I can answer that is to say that, without being asked about the Christmas party, the commissioner and I were both asked a more general question but it goes to the same point. Just before Christmas we did a major press conference on 20 December, and I draw your attention to what Commissioner Negus said about the way the investigation was being managed. He said that a very close eye was being kept on certain figures, and the AFP would move quickly if there was any harm to the community, actually or in prospect—for instance an importation of drugs.

Senator RONALDSON: Minister, can I ask you. Given the evidence you have just heard, is the government concerned that there might be officers who have been involved in this activity, but who clearly have not been stood down and are still part of the Customs service?

Senator Ludwig: It is vitally important that you put in context what the Customs officers are saying. Clearly they want to manage the way forward. It does appear to be part and parcel of an ongoing investigation. It would be unwise for the government in this instance to start intruding when the acting chief executive officer has the matter in his sights. On that basis I think it would be inopportune for us to make the types of suggestions you have outlined. I am confident that Mr Pezzullo has this matter well in hand.

CHAIR: Senator Ronaldson, I am getting a bit nervous that we might be straying into questions relating to an internal investigation of matters that, as you know, would be extremely confidential. I am wondering if we can focus back on the additional estimates, the budget and the expenditure-the reason that we are here. Perhaps what you want to know would be best pursued in a private briefing. I am a tad nervous that this is being publicly broadcast.

Senator RONALDSON: Thank you, Chair. Minister, does the government believe it appropriate that Customs officers who were apparently at this Christmas party attended by a crime figure have not been stood down and therefore still have the ability to potentially influence the activities or behaviour of others within the Customs service?

Senator Ludwig: Again, I think the question that you asked is more an answer than a question to the relevant Customs officers. I think it is unwise for me to then provide a broad response to what is effectively a loaded question. As I said at the start, this is a matter that Customs is investigating. It is not for the government to trespass into that area. These matters are on foot. It has been a longstanding principle that the government receives briefings about what is going on in Customs but does not participate or direct Customs on how to undertake their investigations.

Senator RONALDSON: Having heard that evidence today, will you be advising Minister Clare that this situation is still ongoing, that people have not been stood down and that they are in that position to influence? And will the minister act in relation to the agency to address that matter?

Senator Ludwig: Again, I think that has assumed Mr Clare is unaware of that. I would take advice from Customs. I am in a representative capacity here, but I would expect Customs to continuously provide input into the minister's office about outcomes, because that is what Minister Clare would be focused on—in other words, to ensure that the public were safe, that the Customs work was continuing in a strong way to ensure our borders were protected. I would have thought—

Senator RONALDSON: I take it from your answer that Minister Clare is aware of this situation and that he has not—

Senator Ludwig: Again, I think you are now verballing me. That is not what I said.

Senator RONALDSON: I think if you go back and look at the transcript, you certainly left that option open. I am asking you whether indeed that is the situation, whether Minister Clare is aware of the fact that these officers who have been at a Christmas party with crime figures are still in a position to influence other officers within the organisation.

Mr Pezzullo: I can perhaps assist, Senator and Minister. During the time that I have been the acting CEO—and, again, following the guidance of the chair, it is very difficult for me to give you a full answer because of the operational nature of the matters in hand; but to give you a process answer—I have given Mr Clare on numerous occasions an assurance that, in working with the Integrity Commissioner—so the head of ACLEI—and the Federal Police Commissioner, we are synchronising our actions so that nothing is done through disciplinary processes that will compromise sensitive ongoing investigations. I really cannot in a public forum say anything more than that. Conversely, and there are some matters on foot, where the Integrity Commissioner and the Police Commissioner are of a view that actions that I take as the acting chief executive will not fetter or in any way interfere with their investigations, they, in effect, give me that guidance as a sort of green light and then we move on with the matters. But other than giving you an assurance and this committee an assurance that those matters are very carefully coordinated between the three principals, and we manage it at agency head level, without then starting to go into each individual instance there is really nothing more I can say to this committee.

Senator HUMPHRIES: Can you tell us from the profile—and you have been talking about this, Mr Pezzullo—what sort of people are importing these performance or image enhancing drugs? Presumably, these drugs are being imported mainly for supply. Do we know whether they are mainly individuals or whether there are businesses involved in this importation? What can you tell us about it?

Mr Pezzullo: I would prefer to leave, if you like, the summaries of the information that we have provided to the Crime Commission was very well and faithfully laid out in its public report, and that is probably as much as I can say. If I go to the next level of detail down that your question seeks, it really starts getting into how our profiles are constructed, who we target and the like. The ACC report speaks for itself, and it is the subject of collaboration amongst a number of agencies, including our own.

Senator HUMPHRIES: Can you tell us from which countries these drugs are principally being imported?

Mr Pezzullo: If there is anything I can add, I will need to come back to the committee. I have got the aggregate levels of seizures that we have detected both in terms of steroids and hormones. Some of that is described in the ACC report. Whether I can give you a country breakdown, I will have to have a look at that and see if there is anything I can usefully provide to the committee.

Senator HUMPHRIES: On the Insiders program on Sunday 10th, last Sunday, the Minister for Home Affairs was asked whether the allegations of corruption at Sydney Airport late last year had anything to do with the revelations about drugs in the sporting world. He said that there was no link whatsoever between those two things. Are you confident that that is the case?

Mr Pezzullo: I think, as I gave some evidence a few minutes ago, I have actively asked the question through our professional standards people—so not necessarily the people who have been working on the intelligence side that I was referring to before who are dealing with the problem in itself. I have gone separately through our professional standards people and they have reached out to ACLEI and other agencies to see if there is any nexus between some of the matters that I have been talking about in my opening statement and in subsequent evidence as to whether there was any nexus between that activity and the matters that were disclosed in the Crime Commission, and, as I am advised, there is no nexus that has come to light.

Senator HUMPHRIES: Can I turn to some issues to do with people smuggling. Can you give the committee the illegal maritime arrival figures for both individuals and vessels in 2013 so far?

Mr Pezzullo: I might ask Ms Dorrington to lead off on that.

Ms Dorrington: So far, in the year 2013 as of 1 February, there were 10 vessels and 465 people—465 people excluding crew—and 21 crew.

Senator HUMPHRIES: What is your agency's forecast for boat arrivals for the rest of this calendar year?

Mr Pezzullo: I will take that. We do not produce forecasts as such. We are not in the forecasting game. Our job is to develop the intelligence picture around what syndicates are operating, which syndicates are more active than others, where ventures are being prepared and the like, and we do so in close collaboration with partners such as Indonesia, Malaysia, Sri Lanka and others. But we have no role directly in generating forecasts that are relevant, if you like, to budgetary or other considerations.

Senator HUMPHRIES: So you just have to direct resources according to what turns up? You do not have a way of planning or anticipating what you might—

Mr Pezzullo: No. Far from it. As I was seeking to imply, and perhaps I did not do it clearly enough, we have an operational intelligence role so that Admiral Johnston, for instance, in his role as Commander BPC is alert to where the hot spots are and where vessels are likely to next hit us, whether it is Christmas Island or in other key arrival destinations. Ms Dorrington is home division. She is currently acting as the Chief Operating Officer, but she is the head of our intelligence area. Her job is to put that information together in terms of getting a pattern of which syndicates are operating and the like. We do a lot of work in what I would describe as that operational intelligence space so that we can apportion assets and focus on key priority areas.

Ms Dorrington: Senator, can I take the opportunity to update those 2013 figures.

Ms Dorrington: What I did tell you about the 2013 figures as of 1 February was correct, but I have just noted another brief which advises me that there have been a further six vessels. So, in 2013, so far, 16 vessels and 891 persons in total.

Senator HUMPHRIES: On 5 December last year, I understand that two Bay class vessels, the ACV Storm Bay and the ACV Corio Bay intercepted an illegal maritime arrival carrying 110 passengers. Is that correct?

Rear Adm. Johnston: I don’t have a recollection of each of the intercepts if you have the location I do recall there was an intercept off the north-west coast of Australia around that time. Do you have any further details that will help my recollection around that event?

Senator HUMPHRIES: Actually I don’t, I’m sorry. I don’t know where this interception occurred. I’m told that the vessel was carrying 110 passengers and those two customs vessels have a maximum carry capacity of 16 people each and there may have been the need to call another boat to help transfer the passengers to Darwin.

Rear Adm. Johnston: That event did occur. The intercept did involve a vessel off the north-west coast. That vessel subsequently took on water and was unseaworthy. In essence, what we were dealing with was a safety-of-life-at-sea circumstance. You mentioned that all vessels have a normal carrying limit capacity, and that does change when we are dealing with a matter of imminent distress or danger of life, in which case, as we have done in other cases, we will use all the assets available to us to preserve life and then manage the circumstances to get them to a place of safety.

Senator HUMPHRIES: So were the 110 passengers all transferred onto these two Australian Customs vessels?

Rear Adm. Johnston: Yes. That is correct. That is my recollection.

Senator HUMPHRIES: So they would have had about 55 or 60 people on each vessel, but they were designed for only 16 people each?

Rear Adm. Johnston: We very carefully risk manage each of those circumstances and we take advice from the masters of the vessel on what they might need to ensure that they can provide safety. The passage to get them to Darwin, which is where they were taken, is relatively short, so the masters very capably managed that circumstance to deliver those people to safety. But it is something we monitor with them very carefully.

Senator HUMPHRIES: I accept all that, but I am not sure you quite answered my question. Putting 50 to 60 people on vessels designed for 16 is obviously a measure that in an emergency has to be contemplated, but it still must, surely, have been a dangerous manoeuvre. It would be 200 or 300 nautical miles, at least, that had to be traversed to get these people to Darwin.

Rear Adm. Johnston: It does come with risk, and we have to manage those risks, but it is better than leaving the people in the water.

Senator HUMPHRIES: I agree. I understand that. I do not question that it had to be done. I fully understand that you could not leave people in the sea. But I am interested to know what level of danger or risk was imposed on those passengers and the crews of the Customs vessels by virtue of the necessity of collecting those people from a sinking vessel.

Rear Adm. Johnston: The circumstances where we embark that many people on board mean that we have to provide for their security and safety and we have to offer them food and, as best we can, the shelter to go with it. They are the types of risks that men and women on the water have to face when they are managing those circumstances. We then seek to get them to a position to be able to transfer the people ashore just as soon as we can—and those were the arrangements that applied in that circumstance.

Senator HUMPHRIES: So a third vessel was not called or used to get or to evacuate those passengers back to Darwin?

Rear Adm. Johnston: I do not have the precise details. I think in that circumstance a third vessel may have come down in the proximity to be able to provide additional support if it was required, but my recollection is that that was not required by the two masters on that occasion.

Senator HUMPHRIES: Could you take on notice whether there was a third vessel involved and describe to us the circumstances in which it intervened? I assume it did not arrive at the scene at the point where the boat was taking on water but came later.

Rear Adm. Johnston: Later, yes.

Senator HUMPHRIES: If you could give us the details please. I take it those two Bay class vessels are being used pretty well continuously to intercept illegal entry vessels in the northern waters.

Senator HUMPHRIES: In January, the minister made a statement to the press about an incident:

ACV Ocean Protector, operating under the control of Border Protection Command, has worked with Oil and Gas Installation (OGI) support vessel Offshore Quest, approximately 92 nautical miles east-south-east of Ashmore Islands, to transfer 11 suspected asylum seekers into Australian Government custody.

Yesterday the Offshore Quest contacted the Australian Maritime Safety Authority’s Rescue Coordination Centre (RCC Australia) to report that passengers from a small Indonesian fishing vessel had boarded the vessel.

That is, the Offshore Quest. Can you tell us what happened in that incident exactly?

Rear Adm. Johnston: Yes, I can. If I step through the time line of events, that will give you an indication of that particular incident. The advice I have is that, at about 5.15 pm on 23 January, the Offshore Quest was approached and boarded by a small Indonesian fishing vessel with about 11 people on board.

At that time the Offshore Quest was about three nautical miles away from an offshore oil and gas installation. To give you a sense of the geography, it was around 90 miles east of the Ashmore Island group. At 5.32 on that day the Rescue Coordination Centre advised my command of the incident, and we had advice from the Offshore Quest that was relayed to us that the people who had boarded were calm, they displayed no intent to harm the crew at all, but due to language problems it was not clear to the crew on board the Offshore Quest what assistance the people who had embarked required.

Border Protection Command, working both with the shipping company and the vessel itself, made arrangements for one of our vessels to rendezvous with the Offshore Quest, which we did that night, at 11.45. We then boarded the Offshore Quest and tried to determine what the circumstances of the people were. We understood that they wished to come to Australia, and they were then transferred from the Offshore Quest onto the Ocean Protector for that transportation.

We were subsequently able, through some questioning, to better understand what the circumstances of the 11 people were. In essence, they had a lack of food, water and fuel and they were seeking assistance. That was provided to them in terms of the embarkation onto the Ocean Protector.

Senator HUMPHRIES: The minister's media release uses the language that passengers from a small vessel had boarded the Australian vessel, the Offshore Quest. Normally they refer to taking people off a boat—taking them rather than them actively boarding the vessel. There was no implication in that statement that there had been active boarding by these people without invitation—they had not tried to board the Offshore Quest without the permission of the people on board Offshore Quest?

Rear Adm. Johnston: The boarding means that the people had come on board the vessel, which is accurate. The circumstances at that time, why they had done so, were not entirely clear. I think 'boarding' is a reasonable representation of the 11 people coming on board the Offshore Quest.

Senator HUMPHRIES: Do you think that the crew of the Offshore Quest felt threatened or unsafe in the way that this boarding occurred?

Rear Adm. Johnston: The advice to me is no, because there was no indication of harm or any intent for harm displayed by the 11 people. But the crew took a precaution, which was to secure themselves within the bridge area of the ship so that they had no immediate contact with the 11 people.

Senator HUMPHRIES: How does that work? The crew were on the bridge, so who was assisting the people from the fishing vessel onto the boat?

Rear Adm. Johnston: I believe the people from the fishing vessel boarded themselves. Typically, the offshore oil and gas support ships have a very low point of entry—the freeboard is low so it is easy for people to climb on board. I understand that, once boarded, they just sat on the deck and waited until the Ocean Protector rendezvoused with them.

Senator HUMPHRIES: So it is not entirely clear to you whether these people were asked to come on board or whether they simply, because the boats were close, took the opportunity to board?

Rear Adm. Johnston: My understanding is they took the opportunity. They needed food and water, they saw a larger vessel there that potentially could provide that, and they then boarded the vessel seeking that assistance.

Senator HUMPHRIES: In the past six months have there been other examples of asylum or fishing vessel passengers boarding commercial or private vessels uninvited or in circumstances where it is not clear whether they were invited aboard or not?

Rear Adm. Johnston: This is the first instance of people boarding a vessel in this nature, within that timeframe.

Senator HUMPHRIES: Do you issue guidance to vessels operating in these areas as to what to do in the event that a vessel such as this comes alongside and the passengers on board wish to board the Australian vessel?

Rear Adm. Johnston: There are standard protocols for any safety matter, if the vessel is concerned for its safety or security, and they are that, as occurred in this instance, it would ordinarily be reported through the Rescue Coordination Centre—Australia; additionally, each vessel has its own security plan. Each is responsible for its immediate safety and security. That can vary in its approach from company to company, but ships are responsible for their immediate safety and security in these types of matters.

Senator HUMPHRIES: I suppose it is not likely, but are vessels in these circumstances able to distinguish between asylum seekers needing assistance and, for example, pirates?

Rear Adm. Johnston: Normally, yes, I would expect that that is the case, by the nature of boarding, if it were to occur, or the demeanour of the people on board a vessel. I would expect that it would be quite clear to differentiate between the two.

Senator HUMPHRIES: Did Customs have any involvement in the aftermath of this incident? Did they subsequently intercept the boat and take the passengers off it?

Rear Adm. Johnston: Once the Ocean Protector, which is a Customs vessel, rendezvoused with the Offshore Quest, the 11 people were embarked in the Ocean Protector and taken to Christmas Island, yes.

Rear Adm. Johnston: We have an ongoing dialogue with the shipping companies around the circumstances of it, but our view is that it was opportunistic, that they were seeking assistance and that that is the nature of the incident that we were dealing with.

Senator HUMPHRIES: If there is any other information you can provide us about what happened there, I would appreciate your taking that on notice. It just seems like a strange and slightly disturbing development when vessels are boarded apparently without people actively inviting the passengers on board.

I will turn to some questions about staffing in the Customs and Border Protection Service. Can you confirm how many Customs employees you have at the moment, please, Mr Pezzullo?

Mr Pezzullo: I will turn to my relevant brief and also ask the head of strategy, finance and planning to come up to the table. At the moment, we are tracking just a bit over 5,000, but I might ask Mr Groves to give you more precise numbers. I can certainly advise the committee that we have a forecast average staffing level across the year 2012-13 of 5,100, but how we are tracking exactly at the moment I will let Mr Groves speak to.

Mr Groves: At the end of December we had 5,098 paid FTE.

Senator HUMPHRIES: So when Mr Pezzullo says that you have a forecast for the financial year of 5,100—

Mr Groves: Correct.

Senator HUMPHRIES: that means you are basically where you intend to end the financial year right now?

Mr Groves: We have been dropping from the start of the financial year, so I expect that we will probably end around 5,080 or 5,075, which will average out. The 5,100 number is an average over the whole financial year.

Mr Pezzullo: While Mr Groves looks for the relevant data, so that we have apples with apples, the average staffing level—the same measure for the previous financial year, so it is not a 30 June exit—or ASL for the agency for 2011-12 was 5,222. When you say, 'How did you start?' the inference there might be, 'What was your exit point at 30 June last financial year?' or, 'What was the average for the preceding year?'

Mr Groves: In this financial year, our July FTE number was 5,212.

Senator HUMPHRIES: I am just confirming here that the staffing levels have been dropping throughout the financial year.

Mr Groves: That is correct.

Senator HUMPHRIES: Given the increased level of activity we have been talking about in the course of today's hearings, that is obviously not a response to your operational needs; it is a response to the government's requirement that you produce savings for the central budget. Is that correct?

Mr Pezzullo: Like all agencies—all agencies have to conform with the budget strategy, which is well known. There are a variety of measures, both general efficiency dividends and specific efficiencies.

Mr Pezzullo: The flip of that is that, at the same time, partly to do with the point I made earlier about more sophisticated and more powerful profiles, our detections and seizures have gone up. So yes, there is a plateauing and indeed a slight decrease in our staffing levels—agencies have to make decisions about how they cut their cloth in terms of general fiscal strategy—but at the same time, as intelligence systems, analytics and profiles get better, as our collaborative links with both intelligence agencies and law enforcement agencies get better, our seizures and detections are going up.

Senator HUMPHRIES: Isn't it also possible, though, that there is an increase in the volume of traffic across the borders and that you are picking up the same proportion that you were picking up before?

Mr Pezzullo: It is possible. In answer to an earlier question particularly around drugs-in-sport issues, I made a specific point, but it has general application. Because, by definition, illicit traffic is not regulated and people do not register to be crooks, you never quite know how much you are dealing with, so it is possible that trends are increasing and our seizures are increasing at the same time. It is equally possible that we are just getting more of the same pool.

Senator HUMPHRIES: As part of that reduction-in-staffing process, have voluntary redundancy packages been offered to staff, and have there been any involuntary packages?

Mr Pezzullo: We have not had any involuntary retrenchments at all, as a matter of policy. We do have an active voluntary redundancy program. If Mr Groves cannot speak to that, I can get another officer to the table. I just do not know how much detail you want on the issue.

Senator HUMPHRIES: It would be useful if you could give me some figures on how many voluntary redundancies have been offered and in what areas of the service, please.

Mr Pezzullo: Sure. I will just check whether Mr Groves has that to hand; otherwise, I might have to see if there is some other way that we can assist.

Senator HUMPHRIES: How many staff do you have based on Christmas Island and Cocos island at the moment?

Mr Pezzullo: I will definitely need to take some advice on that.

Ms Dorrington: I can possibly begin with the staffing at Cocos island. We currently have seven enforcement officers at Cocos island, and they rotate every 10 days. I require Ms Kelley's assistance for Christmas Island.

Ms Kelley: At Christmas Island we maintain a presence of three full-time officers on the island. They are supplemented by up to nine locally engaged acting officers of Customs, who are employed on a casual basis, of whom approximately four are available at any one time. From July 2012, we have also had four additional Customs and Border Protection officers deployed to the island on two-week rotations.

Senator HUMPHRIES: So that is effectively five full-time officers, albeit rotated, on the island?

Ms Kelley: Seven full-time officers. We supplement the three full-time with four officers who do two-week rotations, and then there is another complement of nine acting officers of Customs who are employed on a casual basis.

Senator HUMPHRIES: Have those figures gone down since the beginning of the financial year?

Ms Kelley: No, they have not.

Senator HUMPHRIES: Could I ask you, perhaps on notice, to tell me how many Customs staff are currently deployed at each of Australia's international airports.

Mr Pezzullo: We will come back to you.

Senator HUMPHRIES: Great. Could I just ask about a statement that the foreign minister made, when he was visiting Colombo, about measures to tackle people smuggling that were to be taken in concert with the Sri Lankan government. He made reference to a four-point plan, and a number of things were discussed in that: intelligence sharing, on-water disruption, advertising to the local population and reducing demand.

To the extent that Customs is involved in those things, can you give us an indication of how much of that four-point plan has been implemented so far?

Mr Pezzullo: I will ask Ms Dorrington to add to this answer, but generally speaking there are a number of ongoing activities that, as a result of Senator Carr's visit, have been intensified. For instance, we had an ongoing program of discussing at a broad level at least our common assessments about the nature of the problem. We have intensified those exchanges. Senator Carr's visit was associated with the inaugural hosting of a joint working group of senior officials. That resulted in an agreement to undertake formal strategic intelligence exchanges. There was a program that has been funded in previous years in relation to public information, particularly in the—for want of a better phrase—feeder areas where smugglers ply their trade and get an interest in people joining ventures. Senator Carr's visit resulted in an intensification of that effort, and the joint working group at the same time discussed the modalities and details of how to achieve that. I will ask Ms Dorrington to add further detail to that answer.

Ms Dorrington: I can give you some further details in relation to the communication strategy, in particular. For a period of approximately three months there have been advertisements based on the no-advantage campaign released in Sinhalese and Tamil newspapers, on radio and television programs and in cinemas. Posters and leaflets have also been created and disseminated. This has been followed up by what I could characterise as a touring roadshow that has visited 32 communities around Sri Lanka which have been identified as sources of irregular maritime arrivals. Customs and Border Protection is also conducting research in Sri Lanka to evaluate the effectiveness of these activities and to identify any future opportunities and messages that we might build upon. We are expecting the results of that research in March 2013—so next month. The messaging is going to continue through the research phase.

We are also looking to undertake an activity at the Sri Lankan government sponsored expo which is scheduled for March. This is a government expo where a number of government activities are being showcased. We will be able to have an exhibit at that expo which will continue on with these messages and try to give people some realistic appreciation of what legitimate paths to Australia look like and what illegitimate paths to Australia look like, if I could characterise it like that. That is in relation to the communication strategy.

There are some other discussions ongoing but no formally agreed package of measures yet. There are ongoing discussions about training, for example. My colleagues from the Attorney-General's Department might want to comment further on that. We are talking about the provision of assistance with communications equipment, boats, motorcycles and so on, and we are talking about the provision of assistance with infrastructure—for example, airport infrastructure.

Senator HUMPHRIES: In that regard the statement the minister made referred to additional surveillance and electronic equipment to help Sri Lanka's capacity to target smuggling operations and also to direct supply, presumably by Australia, of search and rescue equipment. What is the value of that equipment, approximately, and has it been supplied yet?

Ms Dorrington: It is my understanding that it has not been supplied yet. As to the potential value of that, I would have to take that on notice and get back to you.

Senator HUMPHRIES: I want to ask about gun crime. How many handguns have been seized by Customs in each of the last five financial years, starting with 2007-08?

Mr Pezzullo: I think I have some data that can assist. I will just go to it and then ask Ms Dorrington to assist as and when she can. Actually I will ask Ms Dorrington to lead off. The question was about handguns?

Mr Pezzullo: We will start with handguns fully assembled and then go from there.

Ms Dorrington: The statistics that I have are for detections of conventional firearms, parts and accessories, and magazines. If that needs to be further broken down, I might have to take some advice on that. Can you repeat the question again so that I—

Senator HUMPHRIES: How many handguns have been seized by Customs for each financial year starting from 2007-08?

Ms Dorrington: I have statistics for 2008-09 onwards. If I could just clarify the point about these statistics: these are undeclared detections of conventional firearms, parts and accessories, and magazines. So they are not necessarily the same as seizures because undeclared detections are detections of items that are prohibited or restricted but not declared. They are not necessarily seized because they might eventually be released after the importer meets some import requirement.

Ms Dorrington: Starting with whole firearms, in 2008-09 it was 72. In 2009-10 it was 121. In 2010-11 it was 97. In 2011-12 it was 76. In 2012-13, to date, it is 35.

Mr Pezzullo: Just to emphasise the point, if I may, we will have to come back to you if you want any more precision about handguns. These are whole firearms. Some of them might be shotguns, long-barrelled rifles and the like or they could be handguns. The second point is that it is not necessarily an illegal import at that point. As Ms Dorrington said, with undeclared detections where the paperwork has not been filled in and people have not made the appropriate declaration, after further investigation—

Ms Dorrington: I do not have those figures before me, so we will have to provide that on notice.

Senator HUMPHRIES: Can you give me the figures for handguns specifically out of those totals and then for whole firearms and the other categories—disassembled or whatever. Give me each of the categories. Also give me how many in each of those categories were subsequently handed back to the importer. Also, please give me the figures for 2007-08. That would be useful.

Mr Pezzullo: We will take that on notice.

Senator HUMPHRIES: How many times has Customs acted on the advice of the New South Wales Police Force in regards to the illegal importation of guns into Australia since the New South Wales police uncovered the gun-smuggling operation out of Sylvania Waters in March last year?

Mr Pezzullo: I need to understand the question. How many times have we acted on advice? For the best part of 12 months—perhaps just shy of 12 months—we have had an embedded Customs and Border Protection specialist officer working with the firearms and gangs squad. As part of their day to day work, plus the support they get from their headquarters staff back here in Canberra, that officer and the team back in Canberra in the firearms intelligence targeting team would have—and I am not trying to be slippery here—multiple interactions with the gang squad and the firearms squad just in the nature of their work.

Mr Pezzullo: They would follow leads. The New South Wales police through their own investigations would identify leads. For analysts, that is the purpose they are there for. It is a bit like the answer I gave you earlier on the Crime Commission's work around drugs. They can then reach back into very comprehensive data holdings and all of our leads, run profiles and various other leads through our databases and then feed those back to the New South Wales police strike forces that are working on gang related gun violence. That embedding arrangement has been in place for the best part of a year, if not a little bit longer. I would have to refresh my memory on the details.

Senator HUMPHRIES: Just going back to the question on the seizure of handguns, of those figures that you are going to supply me, Ms Dorrington, could you tell me, please, how many illegal handguns seized by Customs contained no serial number or identification number? What proportion of illegal imports does that particular subset represent?

Ms Dorrington: Okay.

Proceedings suspended from 10:29 to 10:46

Senator MADIGAN: My question pertains to the testing of imports. On what basis are imports target tested? I believe that is the term. Is it random testing? Or are particular products or importers or exporting countries or companies targeted?

Mr Pezzullo: There is very little that I want to describe in this forum about how we go about the targeting process. It is not a testing regime; it is a targeting regime. Increasingly over the last number of years, particularly over the last three years, we have moved to drawing on what is called intelligence. You get active leads from all sorts of agencies, such as the Federal Police, our state and territory police colleagues, the crime commission and, indeed, overseas partner agencies, such as border agencies offshore, drug enforcement agencies—all the sorts of agencies you could imagine would draw information in. We develop from all of that intelligence what we call targeting profiles—and I do not really want to go into too much detail about they consist of—but they look at imports through a variety of lenses. Who is sending the import? Who is receiving it? Is it coming through sea cargo? Is it coming through air freight? Is it coming through the postal system? On the passenger side, are persons arriving—I don't think your question went to persons, I think it was about physical goods, but I will just cover the answer anyway—on standard commercial flights or are they coming on cruise ships or are they coming on small craft?

All of that is thrown into a system that I described to Senator Humphries before the break as our intelligence and targeting system. I have to choose my words very carefully here. Through a combination of very focused profiles that pertain to very specific things—and I do not want to characterise those things—or in some cases on a slightly more randomised basis to make sure that our intelligence profiles have not been spoofed or compromised by our adversaries, we will screen, which is the next level. Once you have targeted imports, you will then screen imports through a process of both inspection through, say, X-ray machines, or further deconstruction through physical examinations, ultimately down to the potential destruction of the goods, and then detections of illicit substances and the like may or may not follow. That is a very general description of what I have called the end-to-end process. It starts with intelligence, moves through targeting and then gets into screening and that in turn falls into broad level inspections and then quite forensic examinations.

Senator MADIGAN: Are you able to tell us what percentage of imports were target tested by Customs and Border Protection at the border for their compliance with Australian regulatory safety standards?

Mr Pezzullo: For all border requirements, whether for criminal intelligence purposes, things like therapeutic goods, product safety and the like, we provide a service on behalf of 40-plus agencies, federal, state and territory. All goods are risk assessed. Everything coming into Australia through imports is put through the intelligence process I just described to you. It s a little difficult for me respond to your question without some explanation because of the use of the term 'target tested'. If the intelligence process suggests that we should have a deeper look at something, we will either run sensitive operations that I do not want to further describe here with law enforcement colleagues or we will inspect it through an x-ray machine or some other method. If we have reason under our act to further pursue what is called an examination level inspection, we can physically pull things apart and deconstruct them to the point—these judgements are not made lightly, of course—where the goods ultimately are potentially rendered useless. Everything is put through that intelligence process.

Senator MADIGAN: Of these goods that are tested or, for want of a better word, scrutinised by the department, what is the percentage roughly that arrive by air?

Mr Pezzullo: Again, I am sorry to constantly be caveating my answers with explanatory statements. There are very big things that arrive in Australia, like big machines, and everything down to letters. I do not know if you want me to weigh it by volume or by type of import, and I might have to be assisted by some colleagues here in any event. You could probably measure that by value, so what is the declared dutiable value of the goods, or it might be done by weight. There are different ways to measure. Unless I get more precision in the question, it is a bit hard for me to answer it.

Mr Pezzullo: Indeed, but lots of things come by air, I can assure you.

Senator MADIGAN: Are those imports that arrive by air tested in the proportion to the percentage of total imports that they make up?

Mr Pezzullo: With goods arriving by air, which in turn break down into airfreight, air cargo conveyed by overnight express companies or bags of mail—again, it is the use of the word 'testing' that I need to step around—everything is subject to the intelligence process I described and then depending on decisions made on the basis of that intelligence, goods are then further screened, inspected and examined.

Senator MADIGAN: What proportion of the total imports scrutinised fail to meet the Australian standards?

Mr Pezzullo: They are all different sorts of standards that we look for. We do not enforce all of the relevant laws but we act as an enforcement agency for a range of agencies—therapeutic goods, counterfeit material. Is there a particular standard that you have in mind?

Senator MADIGAN: My question relates to the fact that there are standards for goods that Australian companies have to comply with. There are imports coming into the country—

Mr Pezzullo: So product safety standards?

Senator MADIGAN: Product safety, whether it is made to the Australian standard, et cetera.

Mr Pezzullo: I might get some assistance from Ms Vivian, who is the head of our cargo and trade area. If we are focussed in on product safety, we are an enforcement agency for a whole range of regulators. Often product safety, as you know, tends to be a state jurisdiction but we perform the enforcement function at the border. I might ask Ms Vivian to describe to you how we support those agencies in relation to things like product safety.

Ms Vivian: We do not formally enforce Australian standards at the border. There are certainly things we look for at the border on request of these agencies but the point I make is they may come in over the border not meeting Australian standards but then work would be done on them domestically. So in terms of your split between what is meeting Australian standards, we would not be able to give you that.

Senator MADIGAN: Has the number of imports that have been scrutinised or tested increased or reduced over the past five years?

Ms Vivian: Over the last five years we have had a fairly consistent target. It depends where you are looking, but, for instance, from 2009-10 right through to 2011-12 in the air cargo world we would look at around about 1.5 million items. Before that we looked at about 6.15 million items, but, as Mr Pezzullo has pointed out, what we do is take an intelligence-led approach in terms of risk assessing what we look at.

Senator MADIGAN: Has the proportion of imports that are scrutinised or tested after arriving by air remained the same over the last five years? Or has there been an increase or a decrease, depending on how much freight is coming through?

Mr Pezzullo: Senator, perhaps the best way to answer that is to say that in the period since 2009-10 financial year, as Ms Vivian has just pointed out, there has been a fairly constant rate of inspections of about 1.5 million articles. Because it is not a volumetric target, unless Ms Vivian advises me otherwise—as more air freight has come in, by definition that 1.5 million over time will represent a slightly diminishing amount of the total volume coming in. I think that goes to your question. What is not diminished over that time, and in fact our performance in this regard has improved, is the fact that, whether an item is screened or not, it would have been the subject of an intelligence evaluation through ever more powerful systems of what are know as data analytics and profiles. What has changed over that time is the potency of our intelligence has improved and will further improve, while the level of physical screenings since about 2009-10 has remained constant. I think that answers your question precisely.

Senator MADIGAN: As a result of your testing is there any trend that suggests that the number of illegal imports by air is increasing?

Mr Pezzullo: As I said to Senator Humphries before the break, the thing that we know—and Ms Vivian will have a better breakdown than what I have in my head—is that our detections and seizures across all categories—air freight, sea freight, passengers carrying drugs and the like—generally speaking are increasing as our intelligence systems are getting better. As I said to Senator Humphries before the break, whether you can draw an exact mathematical nexus or not, does not mean the size of the illicit market is increasing or it is simply growing consistent with GDP and population. That is not something that we have competence in—we are not the Crime Commission or the Federal Police or a policing agency. The size of the illegal market in Australia is something we can assist with, but we are not a prime agency on. I would caution against any kind of mathematical nexus being drawn between 'Oh, their seizures and detections are going up therefore the size of the illegal stream is going up.' It may be that we are breaking it up and finding more of the same, or perhaps a diminishing, pool.

Senator RONALDSON: Mr Pezzullo, I want to take you back to our discussion before about these officers who were involved in the Christmas party who have not been stood down. Is the union involved in discussions about the nature and extent of disciplinary action?

Mr Pezzullo: Senator, I did not say that they had not been stood down. What I have said is that all actions with a disciplinary consequence are being synchronised and coordinated with the Federal Police and ACLEI. In some cases officers are the subject of ongoing code of conduct proceedings. In other cases—

Customs and Border Protection has been alert to the risk of corruption and criminal infiltration for a number of years. We have appreciated the risk that criminal groups will attempt to infiltrate the service so as to gain access to sensitive information or even active support for the smuggling of illegal, prohibited or regulated goods.

I presume you are aware of media reports in relation to this matter both from the Sydney Morning Herald and the ABC, from recollection. On 20 December the Sydney Morning Herald stated:

Leaked customs documents dating back to 2007 detail multiple internal warnings that customs lacked the power, resources and ability to detect corruption and that its anti-corruption framework was "outdated and requires revision".

Mr Pezzullo: I do not wish to comment on documents that are purported to be internal memoranda or minutes if they have been made available to Fairfax and/or the ABC. I have checked, and it has been done through unauthorised disclosure. So I will not comment on those documents and in fact—

Senator RONALDSON: I am asking you whether there were leaked internal e-mails or internal e-mails that you have seen in relation to matters such as 'warnings that customs lacked the power, resources and ability to detect corruption and that its anti-corruption framework was "outdated and requires revision"' and 'better anti-corruption intelligence gathering, drug and alcohol testing and ''the mandatory reporting of fraud".' Have you had a look, since you came in, at what was said by the organisation prior to your getting there?

Mr Pezzullo: Yes, and I have reviewed internally documents that appear to be similar to or perhaps even identical to the ones that the journalists in question have got. I do not want to comment on the veracity of those particular documents—they might be drafts; they might be amended or adjusted documents.

Senator RONALDSON: But you have personally seen information that is similar to the matters raised—

Mr Pezzullo: Correspondence of that kind, dating from the latter part of 2007.

Senator RONALDSON: I assume that these were from senior people within the organisation. Is that a yes?

Hansard cannot pick up the nod.

Mr Pezzullo: Sorry, Senator. I was just going to have a quick swig of a beverage. Yes.

Senator RONALDSON: Thank you. I assume that Customs passed these concerns on to the relevant ministers at the time. I think it was Minister Debus from the 2007 election until June 2009, Minister O'Connor from June 2009 to December 2011, and then Minister Clare since then. So I am assuming that these issues were raised with various ministers.

Mr Pezzullo: I will answer your question directly from my personal knowledge, Senator. For the two years from mid- to late-2007 to mid-2009, I do not know the answer to your question. I can take that on notice. And if correspondence has gone forward to ministers I will look to what I can further advise you through the notice process.

Mr Pezzullo: 'I just do not know' is the answer. Mr Carmody was the CEO at the time. As you say, there were two ministers over that period, Ministers Debus and O'Connor. I do not know what Mr Carmody put to those ministers prior to July 2009. What I can describe with more certain knowledge, in fact quite certain knowledge, is that from July 2009, when I took up an appointment on coming across from the Department of Defence as the chief operating officer, there were a series of changes and reforms made, some of which I described in very brief—

Senator RONALDSON: Are you suggesting to me that between December 2007 and July 2009—is that what you are talking about?—

Mr Pezzullo: July 2009.

Senator RONALDSON: there was no correspondence or reports of meetings between Customs and these respective ministers in relation to the concerns that were raised in these emails, which you acknowledge are true and correct?

Mr Pezzullo: As I indicated I earlier, I will see what I can make available through the notice process.

Senator RONALDSON: And will you provide me with details of any memos between Customs and those ministers and advise me when that information was given to the ministers and whether it was done verbally or in writing. Are you able to say whether—

Mr Pezzullo: Yes, Senator, I will take that on notice.

Senator RONALDSON: Thank you. I do find it extraordinary—it is not a long time ago; it is three years ago—that there is no indication, no Customs information, about discussions between the minister and Customs in relation to anything. Have you got any memos or briefings at all?

Mr Pezzullo: All I am saying is that I do not know. There might be a mountain of it. When I get back to the office, I might find vaults full of it. I might find rooms full of it. I just do not know.

Mr Pezzullo: With more certain knowledge—and the details I will need to wrap up in the same notice process—from July 2009—I know, because I became a member of the executive team at that point—a series of reforms, many of which touched on the matters that you described and that are in documents which date from late 2007 through to the mid-2009 period, were being progressively acted upon. As I said in my statement, without going over it in detail, the Internal Affairs unit, which up until mid-2007 had about five officers, without a particular range of powers and authorities, had expanded in 2009 into the Integrity Professional Standards Branch. We very actively brought in a number of associated and independent functions—things like employment checking, security vetting, pre-employment organisational suitability checks, fraud control, anticorruption planning. In mid-2009—I will have to check the date to be precise, but I certainly recall being briefed on it in quite some detail—we created an internal intelligence function around corruption and the like.

Senator RONALDSON: Yes, you have indicated this to the committee before. Since July 2009, which ministers have you met in relation to the Customs concerns, or which ministers has Customs met with to express concerns about the level of corruption which you, on your own words,—or the organisation has known about—have known about for a number of years?

Mr Pezzullo: I have said that we have appreciated the risk for a number of years. In terms of my direct personal knowledge of it, I have had contact with the minister since September 2012, when I became the acting CEO—

Senator RONALDSON: You indicated that you knew nothing before July 2009, but you said 'since July 2009 I have knowledge'. So between July 2009 and the announcement in December by Minister Clare about what was going to be done, I assume that Customs had spoken to both Minister Clare—

Mr Pezzullo: I was going to go on to say that I know what happened since September 2012 because I have been doing it directly. Prior to that, my job was to support Mr Carmody, who, as the CEO, had the discussions and indeed provided both formal written advice and oral advice. I can see what I can make available through that notice process that I have already agreed to take.

Senator RONALDSON: I assume that part of that correspondence and verbal briefing also included on the back of those emails and other information requests for appropriate resourcing.

Mr Pezzullo: They would have gone to resources; they would have gone to powers. Certainly in 2010 there was definitely discussion, because it required legislation, of course—amendments to legislation—to bring us under the ACLEI jurisdiction. That would have been the subject—I am almost certain but I will check this—of advice to Mr O'Connor, who would have been the sponsoring minister. And there would have been an audit trail of advice just in relation to that matter alone, the ACLEI jurisdiction, which I just note parenthetically was not referred to in any of the documents that I think you have described several times as emails. I think the documents that are in the papers are internal memoranda.

Coming under the ACLEI jurisdiction was not contemplated or suggested in that period 2007 through to 2009. That was something that Mr Carmody and the then minister, Mr O'Connor, and others developed their thinking around in 2009 and 2010.

Senator RONALDSON: I presume that resourcing would have included financial resourcing—additional funds to address this issue.

Mr Pezzullo: There were internal funds made available. So, as I said in my statement, the Internal Affairs unit that had been in existence for some 30 years, going back to 1979, by the late 2000s, around 2007, it was a unit of about five. This is only anecdotal evidence—I can get more precision: it has never been more than about five. Mr Carmody made a decision to invest quite significantly additional resources. The branch that I referred to in my opening statement has something like more than 40 officers, and I am intending to deploy more officers.

Mr Pezzullo: I will have to check whether it was the subject of an external request or a new policy proposal, or whether we just simply made a decision upfront that, because of fiscal requirements, we would have to find the resources anyway. I suspect that we took a decision to absorb the costs upfront and to make the decision to transfer the resources internally, and to grow those resources, I should say.

Senator RONALDSON: I want to return to resourcing now. Minister Clare has acknowledged that since this government came to power there has been a reduction of some 750 staff. Is that correct?

Mr Pezzullo: It is in the ballpark. I think we are about 5,000. Over the time period that you have described, I think we were 5,700-odd. So that seems right, Senator. I will correct it if I need to.

Senator RONALDSON: We have got an acknowledgment from you that Customs has known for some time about the threat to border security through corruption.

We have acknowledgement that internal emails alerting to resourcing and other issues were being sent from 2007 on, yet in 2009-10, 220 staff were cut; in 2010-11, a further 250 staff were cut; and, in 2011-12, not only were 90 staff lost but the budget cut was $38.2 million. In 2012-13, there was a further cut in budget of $25.9 million and a further 190 staff lost. I hope you are not seriously suggesting that these anticorruption measures, or appropriate anticorruption measures, could be appropriately done internally when there has been some $64 million slashed from your budget and a staff reduction of some 750 people.

Mr Pezzullo: The fact of the matter is we have resourced the function. It has grown. Those additional responsibilities were put into that branch, as I have described, and, most critically, there are resources outside our agency—namely, within ACLEI, which has the powers of a standing royal commission—which have been decisive in getting beyond the theoretical appreciation of risk and getting to the heart of some of these groups and the way they are operating.

Mr Pezzullo: In terms of supervisors and managers? I will have to take some advice on that. I suspect not but I will come back to you on that. With the roll-out of technology such as SmartGate, the number of what we call our basic ranking officer, the Customs level 1 officer, there has probably been if not a plateauing maybe even shrinkage of officers at that level. Automation means that that is what happens. I will have to take on notice the exact profile of what we call the balance between our CL1s, Customs level 1 officers and 2s, 3s and 4s, which are the basic middle-management and supervisory ranks.

Senator RONALDSON: You would be aware that there are allegations that people were coming through when CCTV was blacked out in areas, that junior officers were giving directions. I put to you that these staff reductions have impacted on the ability of those who should be oversighting these Customs officers at the coal face, that their ability to do their job has been diminished, and this has been cart blanche for those officers who, virtually without any fear of apprehension, have obviously completely abused their positions.

Mr Pezzullo: I certainly agree with the characterisation towards the end of the question/statement that they have egregiously abused their position and they will be dealt with—more people are being dealt with as we speak. Whether the service has excised 1,000 people, 2,000 people, 3,000 people, 4,000 or 5,000 people, if I draw a bell curve of people who are going to get up to this sort of activity, the people in the middle and those who are rather more saintly in all of this, you will find the possibility of corruption in all sizes of agencies. There are smaller border agencies than ours which have these sorts of problems and there are bigger ones as well.

It is not a function, if I may put it in these terms, of size per se; it is a function of how you run what I described in my statement as a disciplined uniform service with strong protocols around command and control and dealing with insubordination and the abuse of office, which should be the intrinsic make-up—whether you are dealing with the Army, the police, the emergency services or our service, your senior NCOs and your junior ranking officers, if I can use that sort of military analogy. That is the culture that we need to build and we are going to rebuild. We have had elements of it in the past and we are going to build it up once again.

Senator RONALDSON: I put it to you that those dramatic staff reductions have been responsible for, or certainly contributed to, the breakdown of those very things that you are trying to rebuild.

Mr Pezzullo: Again, all I can say is that, if we were a dramatically smaller—

Mr Pezzullo: I am not willing to just agree or disagree with it, because it is more complicated than that. We could be a lot smaller, or we could be a hell of a lot bigger, and we could still have the same problems. If the quality of our internal systems, our command and control structure and our ability to deal with our service as a disciplined service are not in place, that does potentially create—not all people make these bad moral choices—an environment where some of these choices are being made by people who have taken the wrong path.

Mr Pezzullo: Four principal measures. First is the power for the CEO to institute, subject to regulations which have now been passed, a drug and alcohol testing regime. Second is a power for the CEO to declare that an officer's conduct has been such that it meets the test in the legislation of 'serious misconduct' and they are terminated accordingly. Three is the allowance for the introduction of what is known as integrity testing of Customs and Border Protection officers—it also did so for a number of other agencies, but they can speak for themselves. Fourth, it also created a statutory requirement for what is known as the 'mandatory reporting' of serious misconduct.

Senator RONALDSON: Indeed, that was in these memos, going back to 2007: mandatory reporting, drug and alcohol testing. When was the legislation introduced?

Mr Pezzullo: I will have to take that on notice. It was some time in the middle of last year.

Senator RONALDSON: So Customs has been requesting the sort of action that we finally saw in December 2012 for at least three or four years. Are you able to say why this was not done earlier?

Mr Pezzullo: No, Senator, because it is intrinsically tied up with the point I have taken on notice, which is what is, at least in broad terms, the nature of the advice that has been provided to ministers over the time—

Senator RONALDSON: Minister, do you know why this was not done earlier, given that this has been an issue within Customs for some time—indeed, these recommendations for mandatory reporting and drug and alcohol testing have been put forward on numerous occasions before. Are you able to say why it took until December of last year for the legislation to be introduced?

Senator Ludwig: What I can do is seek advice from the relevant minister and ask them whether they can add anything to the answer.

Senator RONALDSON: When was Minister O'Connor first advised of these police and other investigations?

Mr Pezzullo: I don't know. I will have to take that on notice. By the time I was appointed the interim CEO, Mr Clare, was in the chair.

Mr Pezzullo: I was aware of a range of investigations. And once the ACTLEI jurisdiction came into effect on 1 January 2011 I was also briefed on a number of ACLEI matters—but not necessarily all matters. The protocols that we observe are that, in some cases, the CEO and a very restricted number of staff are briefed on very sensitive operations. That has certainly been what I have found since September 2012.

Senator RONALDSON: The minister's announcement in relation to this oversight group, including Justice Wood—is that the right description?

Mr Pezzullo: I might see if Secretary Wilkins wishes to add anything, but I can tell you as a matter of fact that he made the announcement on 20 December 2012.

Senator RONALDSON: Right. And that just happened to be the same time that the allegations regarding Customs officers were made public?

Mr Pezzullo: When you say, 'happened to be', it makes it sound like a coincidence. I think it is for the minister to state his position on this, but I know from just standing at the press conference with him that it was his considered response, in part, to the specific matters that were made public on 20 December. But, I think as he explained in both his statement and his public utterances, it was something that he was more generally concerned about.

Senator RONALDSON: The board. Why wasn't the board put in place when Minister O'Connor was obviously made aware of these police investigations? Why wasn't the action taken at that time?

Mr Pezzullo: The premise of the question is that Minister O'Connor was made aware of these particular matters. As I have said, I have taken that on notice—I just don't know what he was briefed on, either by the former CEO, the Police Commissioner and/or the Integrity Commissioner, whose role was enlivened in relation to our service on 1 January 2011.

Senator RONALDSON: It is hard to believe that the Customs minister would not be briefed on these matters. I presume you briefed Minister Clare when he got the job, about what was happening and what was not happening.

Mr Pezzullo: We have a regular dialogue.

Senator RONALDSON: Yes, so it is hard to imagine that there was not a regular dialogue between your predecessor and the minister—

Mr Pezzullo: Senator, I suspect there was a very regular dialogue—I just don't know the facts and I need to establish the facts before I chance my arm at an answer.

Senator RONALDSON: The previous minister—so, it should be said, the government—has been aware for some time of serious concerns of Customs. Its response to that, effectively, has been to slash 750 jobs and $62 million from the budget. Presumably, the government was aware of these serious allegations at least several years ago. And it is quite clear that, when the first time the minister acted and made an announcement, remarkably—or unremarkably, and I think it is no coincidence at all—was on the day that the announcement of these investigations was given. The opportunity was there well before this for a board to be put in place to address the matters they are now concerned with—was there not? There was nothing to stop that board being put in place well prior to when it was in December.

Mr Pezzullo: I am happy to agree with the rhetorical point, because of course that holds.

Senator RONALDSON: I put it to you that, on the basis of the evidence that we have heard today—and, I rather suspect, from the information that I get, if it is not blocked, which is another likely outcome—that the government has actually contributed to the current situation where organisation crime has infiltrated Customs and as such has severely compromised our border security endeavours.

Mr Pezzullo: Senator, I don't know that I can add too much. I have undertaken to look at the record of what advice the Customs and Border Protection Service has given to previous ministers. I can speak with direct authority on what Mr Clare has been told. And there are other agencies at play here: the Federal Police and the Integrity Commission. We will just have to look at the record and come back as best we can on notice.

Senator FURNER: Mr Pezzullo, you indicated in your opening statement that earlier this month you met with members of the Customs Reform Board. I am wondering whether that was a meeting where the board was constituted to meet, in itself, or was it a meeting where you privately met with them to commence getting some understanding of their operations?

Mr Pezzullo: I am happy to seek some guidance from the secretary to the department, because he heads up the agency that services the board. It certainly looked and felt like a meeting of the board proper, and I was very gratified to be invited.

Senator FURNER: What was discussed at the meeting, and what were the outcomes of that meeting?

Mr Pezzullo: I should state at the outset that the board reports to the minister. He has appointed the board and the board's job is to provide him with advice. I am a very deeply interested participant in the process but I am not a member of the board. I think I will be attending its meetings as and when required. Without breaching any of the board's confidence, it generally related to an update on some of these integrity issues that we have been canvassing this morning, what the Federal Police and the integrity commission are doing. As you can imagine, they have covered some fairly sensitive ground that I am not really prepared to discuss beyond what was in my opening statement and subsequent answers I gave to Senator Humphries and Senator Ronaldson. Also—I guess Mr Wilkins will correct me if he feels this is not quite right—essentially it was agreeing a program of work and what the board might focus on initially and then over the medium term. I think it is also true to say that they commissioned some work that they requested through the Attorney-General's Department be prepared, and of course we will respond accordingly.

Senator FURNER: You indicated Justice James Wood is on the board. Who are the other board members?

Mr Pezzullo: The three members are Justice Wood; Mr Ken Moroney, the former commissioner of the New South Wales Police Force; and Mr David Mortimer, who has had a number of senior private sector appointments, including at TNT and other companies.

Senator FURNER: What were the reasons given for their being selected to be on the board?

Mr Pezzullo: I have seen Mr Clare's statement of the time, and it drew attention to the fact that obviously the judge had conducted work in this general area—he was well-known as the head of the Royal Commission into the New South Wales Police Force and obviously was an eminent legal person in Australia Society; Mr Moroney had obviously direct experience, after several decades of working in the New South Wales Police Force and ultimately ending up as its commissioner, in terms of how you run what I have described variously through the day as a disciplined uniform service; and Mr Mortimer has a particular interest an expertise in business systems, business processes, and how you can make those as efficient, streamlined and effective as possible. I have derived that just from my attendance at the board but more particularly from what the minister stated in his announcing statement when the board was created.

Senator FURNER: Earlier this week there were announcements about an $8 million dollar trial of automated border processing technology between Australia and New Zealand. Would you indicate to the committee how that is going to work. I understand it has something to do with ePassports and how they will be used. Will you also indicate how many Australians have ePassports already.

Mr Buckpitt: Approximately 78 per cent of all Australians currently have ePassports. They are being rolled out progressively, and by the end of 2016 all Australians will have ePassports.

Mr Buckpitt: That is correct. The intention is that over a two-year period we will be conducting a feasibility study. It will initially involve testing the market in terms of supplies of this sort of equipment. We will then be doing a selection, based on the responses received. We will run a test in a laboratory setting, and finally we will be conducting a live trial between two airports in Australia and New Zealand, one in each country.

Mr Buckpitt: The work that we are talking about is in the context of departures. At the moment ePassport, or self-processing through SmartGate, is restricted to arrivals. The intention of this work is to extend it to departures. We are talking about firstly establishing what is the best technology in 2013 to test it, and secondly coming forward to government with a further proposal for the full implementation. The initial $8 million does not actually involve the full implementation. That would be the subject of a separate proposal to government in about 12 to 18 months time.

Senator FURNER: How is SmartGate going? I know there were some measures to roll it out more quickly, and I am just wanting some feedback on how that is progressing.

Mr Buckpitt: That is progressing quite well. We have put in place the additional facilities in Melbourne and in Pier C at Sydney Airport. Our intention is to complete the implementation at Pier B this calendar year and then to start with the remaining seven gates that we would have across other airports. The proposal in the last budget was for an additional 20 gates over a two-year period, and we are well on track to do that. We have also seen a significant uptake in the usage of SmartGate. For example, to the end of December last year we were looking at about 58.5 per cent of all eligible users of SmartGate using it, whereas in the previous period 12 months before, it was 48 per cent. That is a 10 per cent growth, and we are anticipating that that sort of growth rate will continue for the next couple of years.

Senator FURNER: I have some questions around firearm legislation and penalties. I am familiar with the fact that the legislation dealing with aggravated trafficking of firearms has passed the House, and I was wanting some feedback for the committee on how that will operate as a deterrent to trafficking and in targeting unexplained wealth.

Mr Anderson: The legislation creates a new offence where, if someone traffics a large quantity of firearms or components of firearms, it carries a very significant penalty of up to life imprisonment. At the same time, of course, there are existing offences with a penalty of up to 10 years for smaller amounts of trafficking. The intention is to provide simply a more serious offence for the more serious behaviour that might be detected. This applies to components or firearms brought in over a period of six months. The operational agencies—Customs, Australian Federal Police et cetera—would obviously be involved, as they currently are, in detecting the actual importation or attempted importation of the firearms et cetera. This just provides a more serious offence for larger numbers of firearms in advance.

Senator FURNER: It is just part of a larger package for firearms, isn't it?

Mr Anderson: A very large number of reforms were discussed by ministers at the Standing Council on Police and Emergency Management last year and, yes, it is a very large package of measures to enhance the national ability to gather and share data on firearms and to trace firearms.

There are also measures to look at whether there are any gaps in the legislation of states and territories and the Commonwealth to enhance offences. Yes, it is a very large package of measures that is being progressed.

Senator FURNER: Can you give the committee an update on the establishment of the National Firearms Registry and National Firearms Identification Database—how is that going?

Mr Anderson: That is a work in progress. The Standing Council on Police and Emergency Management commissioned work to be done there. That work is in progress but will be reporting back to that ministerial council when they first meet this year.

Senator FURNER: Turning to the new Customs boat, the Cape class patrol boat, I understand the minister recently launched the first one of those coming online. I have personally been on board one of the Bay class patrol boats up in the Territory and I have seen how they operate. I just want an understanding of how the new boats will differ to the Bay class in terms of surveillance communication and all those sorts of things—all the bells and whistles.

Mr Perry: The Cape class patrol boats are very different in their capabilities to the Bay class. They are very similar in size but very specifically designed for a law enforcement task as compared to the Armidale class patrol boats. They have a greatly extended range and a larger crew on board. We have also made provision to carry up to 50 PIIs on board those vessels, so they will have a much greater carrying capacity than the Bay class have.

The on-board systems are much more complex. We are putting classified data exchange systems on board both at protected and secret level. So in the integrated system that works in Border Protection Command headquarters we can provide that picture out to the vessels. It will be the first time we have done that. The increased number of crew will allow us to operate more tenders. The seakeeping capacity of those vessels will be much greater than the Bay class and much more conducive to this sort of offshore operations that we find ourselves conducting more than when the Bay class were considered. When those vessels were commissioned in the late 1990s, most of the activity was Customs and fisheries activities much closer to shore. With people-smuggling activities and offshore fishing, that operational response is required much further off our coast.

Senator FURNER: What is their range in terms of refuelling requirements compared to the Bay class?

Mr Perry: They have what I would call a 'drop-dead range' of 4,000 nautical miles. That would allow them to get out to places like Christmas Island and operate for a week or so on station and come back without refuelling. With refuelling at places like Christmas Island, obviously that range gets extended.

The other point to note on the mode of operation is that we work on a crew rotation cycle of 22 days on and 20 days off for the Bay class. For the Cape class this will be a 28-day on-off rotation, which will be more conducive to allowing us to maximise the extended range and capability of the vessel.

Senator FURNER: I also have some questions on boat towbacks. It might be beneficial to get Rear Admiral Johnston to the table.

Mr Pezzullo: Perhaps you could ask the question and then I will decide how we best answer it.

Senator FURNER: Firstly, I am familiar with a report released through FOI entitled Report of the deliberate analysis activity: implications of a 'turn back boats' policy. I want to start with some questions around the issues that have been raised as a result of that particular FOI report.

Mr Pezzullo: I will ask Rear Admiral Johnston to address that as best he can. I do recall that a document was released through FOI, but I just want to stress at the outset that we are not a policy or legal agency. Our job is to enforce the laws of Australia in the maritime zone and to follow government directions as set from time to time. Let's start with the examination of that document and we will see how it goes.

Senator FURNER: Sure. This committee has had the Chief of Navy, Admiral Griggs, before it in the past. He has certainly described the concerns about such a policy in terms of risk to life not only for the naval personnel but also for the asylum seekers. That report concurs with the view of the Chief of Navy that such a policy would incur such risk. I want to know whether the Navy still holds that view that the policy of Mr Tony Abbott and the coalition of towing boats back places the lives not only of naval personnel but also of asylum seekers at risk?

Mr Pezzullo: Sorry, I do not mean to be difficult but the Admiral, notwithstanding his dress and accoutrements, is not actually here has a representative of the Royal Australian Navy. He is a serving naval officer but, on a day-to-day basis, he works for me. So you are asking questions of the Customs and Border Protection Service. If you want to ask questions of Defence, particularly the Navy, about what views they might hold, that really needs to be done in another committee.

Senator FURNER: so I am sure he is familiar with those responses, which are on the public record, of the Chief of Navy. I am asking whether he holds the same view as the Chief of Navy that those risks are alive and well.

Mr Pezzullo: If you are asking for this agency's view, I am prepared to allow the admiral to proceed.

Rear Adm. Johnston: I am aware of the evidence the Chief of Navy has provided previously through the Defence hearings. The Chief of Navy has also made it clear that the role of Navy and certainly for me in the Border Protection Command is to execute government policy, which we do to the best of our ability. There are risks, and Vice-Admiral Griggs has outlined some of the risks associated with a turn-back approach. My role and that of those who may be performing that activity would be to manage those risks as best as we could.

Senator FURNER: Would you be able to describe some of those risks—what sort of risks are you referring to?

Rear Adm. Johnston: We have seen in the past when people have become aware that a turn-back approach may be adopted they may either attempt to self-sabotage their vessel or potentially conduct self-harm. Those are some of the circumstances. When they become informed of a potentially adverse migration outcome, they may take action which puts themselves and potentially the people who are responding at some risk.

Senator FURNER: The Border Protection Command report refers to the fact that some of those risks may be virtual hand-to-hand combat on the high seas between the Australian Navy and asylum seekers. Is that a fair enough statement in describing some of the risks involved?

Rear Adm. Johnston: I am not aware of that expression having been used, but we would have a duty of care to those people that we would need to exercise.

Senator FURNER: Duty of care no doubt extends to the asylum seekers as well as the Navy personnel operating on the Armidales, doesn't it?

Rear Adm. Johnston: That is correct.

Senator FURNER: What sort of risk would this sort of policy pose to diplomatic relationships between us and our Asian neighbours?

Mr Pezzullo: Sorry, but Customs and Border Protection do not have confidence in that area. It is not for us to address that.

Senator FURNER: Do you have an opinion on the legal aspects of the proposed policy of Mr Abbott?

Mr Pezzullo: I would not express an opinion on any legal matter but, in any event, questions of legal policy would be for the Attorney-General's Department and other agencies.

CHAIR: In the public gallery we have some graduate interns from the Attorney-General's Department. Welcome to our estimates proceedings. Perhaps in the future one of them will replace you, Mr Wilkins! They might have a little window into the future here. I do not see any of them wearing a bow tie, so that might be the first requirement! It could be a woman—that would be even better.

Senator BRANDIS: I do not want to take too much time with this, and so if it is more convenient to take these questions on notice, please feel free. Can you tell me please how many border protection command boats are operational at the moment and where they are located?

Rear Adm. Johnston: I can certainly tell you how many vessels are active. I would prefer, for operational security reasons, not to give you their precise locations, but I can describe perhaps the breadth across the areas where we currently have vessels deployed. Today—

Senator BRANDIS: Sorry, Admiral, I said operational, you said active. Is there a distinction between those two?

Rear Adm. Johnston: No. You are aware, Senator, that I draw my assets from both the Defence or Navy fleet and from the Customs and Border Protection fleet. Today I have seven Armidale patrol boats available to me, one major fleet unit from the Navy side and, from the Customs and Border Protection, six Bay class, and the Ocean Protector and the Triton, two of the contracted vessels. Sixteen vessels in total and they are currently deployed from Cocos (Keeling) Islands in our far west right through the north out to Cairns.

Senator BRANDIS: I understand why you do not want to identify their specific locations, but how many bases do they operate from?

Rear Adm. Johnston: The bases vary. The Navy ships can get drawn from any of the bases that we have and it depends on the class of vessels. Similarly, the Customs vessels will deploy from bases around which there are logistic arrangements. If it is a Navy patrol boat, the primary bases are Darwin and Cairns, but the large hulled—the major fleet unit—I have could come from either Perth or Sydney.

Senator BRANDIS: Admiral, you said that you had several Armidale class vessels available to you. Do you mean by that that they are active in your word or operational in my word at the moment on your behalf?

Rear Adm. Johnston: That is in part a question for Navy. I identify how many I need for my task, Navy then manages the rotation of its ships in order to provide those to me. Navy would be better placed to answer that question for you.

Senator BRANDIS: In relation to the vessels that are operated by you, rather than made available to you by Navy, how many of those are being repaired?

Rear Adm. Johnston: If you are referring to the Customs fleets at the moment—

Senator BRANDIS: Can you give us an update please on how the introduction of the new Cape class vessels is proceeding?

Mr Pezzullo: Senator, if you do not mind, we might swap over. I will ask Mr Perry to re-join us.

Mr Perry: The first of the vessels was launched in January as planned. Currently, we are scheduled to take delivery of that vessel on 28 March and at this stage all the indications are that that delivery will take place as planned. The rest of the program is proceeding on schedule, with the last boat planned to be delivered in August-September 2015.

Senator BRANDIS: Do I understand that to mean that the entire acquisition program is proceeding on schedule?

Mr Perry: The acquisition program has had a slight modification to it at the request of Austal—

Mr Perry: To try and maintain their workflow, and we have agreed that that workflow would be adjusted. It is actually in our favour. It is potentially an earlier delivery of the second vessel, which at this stage we intend to avail ourselves. It does moderate the overall build production.

Mr Perry: The overall program will be in the vicinity of $350 million. The acquisition component of that was $316.5 million for the eight vessels. There is also an initial contract period for logistics and through-life support of a little over seven years. It is based on when the vessels are completed.

Senator BRANDIS: How much of the $350 million is the logistics and through-life support?

Mr Perry: That is the remainder between the $316.5 million and the $350 million.

Senator BRANDIS: In other words—today is 12 February—effectively it is a year since the last time you had any patrol activity in the Southern Ocean?

Rear Adm. Johnston: I would draw a distinction. My response to you was about having one of the Customs assets in the Southern Ocean. We also have a cooperative program with the French where we provide officers from each other's nations—their officers onto our patrols, or the reciprocal applies. There have been French patrols through the Southern Ocean, including through our zones, where we have a transfer agreement in terms of jurisdiction, and we have provided officers on board French vessels during those patrols over 2012.

Senator BRANDIS: So during 2012 Australia's interests in the Southern Ocean were being protected by the French navy, were they?

Rear Adm. Johnston: We have a cooperative arrangement with the French where we work together, yes.

Mr Pezzullo: And we on occasions protect their interests too, so it is reciprocal. We have a reciprocal agreement.

Senator BRANDIS: But we do not send our vessels into the English Channel, do we, Mr Pezzullo?

Mr Pezzullo: No. In the Southern Ocean, they have interests based on their metropolitan territories—

Senator BRANDIS: Yes, I see. Is that unusual? When is the last time prior to February 2012 that your agency had no Australian patrol vessels operating in the Southern Ocean?

Rear Adm. Johnston: For all the previous years, and I have records here back to 2003, we have conducted a Southern Ocean patrol.

Senator BRANDIS: So, for the first time for as long as your records take you back, which is a decade, last year, apart from the arrangement with our French colleagues, we had no presence in the Southern Ocean. Is that due to a cutback of funds available to you? If you had had the funds, would you have preferred to observe your practice of the previous decade and have at least one Australian vessel patrolling the Southern Ocean?

Rear Adm. Johnston: The Ocean Protector is available to me. That is the vessel that would conduct the Southern Ocean patrols. The operational priorities I have determined for that vessel have taken it north, so it is a question of operational priorities around its current employment.

Senator BRANDIS: Sure, and priorities are in themselves a function of the resources and ultimately funding available to you.

Rear Adm. Johnston: In part, yes.

Senator BRANDIS: In the years from 2003 to 2011, on average, how many Australian vessels were normally allocated to the Southern Ocean?

Rear Adm. Johnston: Are you referring to the number of vessels or the conduct of patrols? There are limited vessels that have the capability to go to the Southern Ocean. I can tell you the number of patrols we have conducted, on a financial year basis.

Rear Adm. Johnston: Certainly. If I step up in chronological order from 2003-04, in 2003-04, it was two patrols; 2004-05, five patrols; 2005-06, five patrols; 2006-07, five patrols; 2007-08, four; 2008-09, five; 2009-10, three; 2010-11, two; and 2011-12, two.

Senator BRANDIS: Has your assessment of the need for patrols in the Southern Ocean changed over that time? In other words, where we sit here in 2013, and were the resources available to you—which plainly they are not—do you see as much need for patrols in the Southern Ocean as in, for example, 2006-07, when there were five?

Rear Adm. Johnston: There have been a number of developments in that area that have enabled me in part to achieve an effect in the Southern Ocean apart from just from patrols. I mentioned the French cooperative agreement. That is one. We also conduct satellite surveillance in the Southern Ocean.

Rear Adm. Johnston: I am not sure how far back it goes, but we have had—

Senator BRANDIS: Let us take it from 2003. We have had satellite surveillance for all of those previous years you have mentioned, haven't we?

Rear Adm. Johnston: I am not sure for all of those previous years, but the French agreement is more recent than that. But, to answer your question, there remains a task for us to perform in the Southern Ocean. It is important that we do so.

Senator BRANDIS: That is really where I am getting to, Admiral. That task has not essentially changed, has it?

Rear Adm. Johnston: We still have an exclusive economic zone around our Southern Ocean territories for which there is a need for us to maintain sovereignty and conduct patrols.

Rear Adm. Johnston: The threat levels change in the area. In terms of the amount of illegal, unregulated or unreported fishing, the IUU fishing, which is one of our concerns, the threat levels do change over those periods, and our operational priorities are then adjusted accordingly.

Rear Adm. Johnston: a presence on board the vessel that enables us to assist the French in areas where we have a jurisdiction.

Senator BRANDIS: Admiral, please do not think I am blaming you for this—you are hardly to blame—but we have gone from a situation in which it took five Australian patrols to protect our interests, in particular our fisheries, in the Southern Ocean a few years ago to having between one and three of your officers on French vessels this year.

Rear Adm. Johnston: But I mentioned that the threat levels have changed. In previous years, we had a number of incursions inside our exclusive economic zone. In the last year we had none. The operational priorities change according to the threat. Satellite surveillance gives me a fairly good insight into what is occurring in those waters, and I adjust our posture accordingly.

Senator BRANDIS: Admiral, it sounds to me as though, if those from whom there is a threat to our economic interests, particularly our fisheries, knew that we are now being protected by between one and three officers on French vessels, when we used to be protected by five patrols staffed entirely by Australian personnel in our own vessels, the attitude of insouciance towards the threat level you seem to display might not be justified.

Mr Pezzullo: In fairness, Senator, I am not sure that the admiral is demonstrating such an attitude. I think that the burden of his evidence is that, whilst the threat has been constant in recent years, if you were to go to back to 2003-04—and we would have to look at the intelligence or at least the surveillance records—it has changed over time. There was longer range penetration particularly from what I would describe as industrial scale illegal fishing activities, very, very large vessels that have to be dealt with robustly, and that—as I recall, at best—tended to be a threat that we were facing in the mid-part of the preceding century. What the admiral, I think, is saying is that, as that threat picture changes—not in recent years, but going back to—

Mr Pezzullo: But, going back to 2003-04, you say that previously five or six, or whatever it was, patrols were going down there. I think there has been a material change, say, from between nine to 10 years ago and today. It could change again, but that is what the admiral is saying that he keeps a very close eye on.

Senator BRANDIS: I do not think you need to know much about maritime history to understand that, if you do not defend your maritime territory, you are more likely to be threatened by those who might seek to make incursions into it. Would you agree with that, Admiral?

Rear Adm. Johnston: It is important that you maintain your sovereignty, and I said that there are a range of means of doing that. The cooperative patrols are certainly an important part of that.

Senator BRANDIS: I stress, Admiral, that this is hardly your fault, but I do not think the Australian public would feel very reassured that one or two or perhaps three of your officers on French vessels in the Southern Ocean, where we used to patrol it ourselves five times a year, provide the level of security over that important area of economic resource that the Australian public would like to see.

Rear Adm. Johnston: What I would offer is that we have strong surveillance in that area. We have cooperative patrols that we rely on. And as our operational priorities permit we deploy vessels into that area.

Senator BRANDIS: What about Japanese whaling? The Japanese whalers are, may I take it, one source of what you have described as a threat to our sovereignty? Is that right?

Rear Adm. Johnston: Australia has a position on whaling in general, that is true; yes.

Senator BRANDIS: What has been the change in the level of activity by Japanese whalers?

Rear Adm. Johnston: I am not sure there has been a substantial change. The Japanese whaling fleet continues to conduct fishing activity or whaling activity in the Southern Ocean and has consistently done so for a while.

Senator BRANDIS: When you say you are not aware of a significant change that tells me that there has not been a significant change, in your assessment. Is that right?

Rear Adm. Johnston: I know they exercise a quota or they determine catch levels. Those do change, to some extent, from year to year. That is not in itself the element that I monitor closely. The Border Protection Command responsibility is around violence at sea or interactions between vessels rather than the whaling activity itself.

Senator BRANDIS: That brings me to Sea Shepherd. Has the level of Sea Shepherd's activities, which do involve deliberate criminal violence, changed?

Rear Adm. Johnston: There are this year more Sea Shepherd vessels in the Southern Ocean than there have been in previous years but I am not aware of any incident between the Japanese whaling fleet and the Sea Shepherd group in the current whaling season.

Senator BRANDIS: The picture you paint is that in a year in which there has not been a change in the level of activity of Japanese whalers and there has been an increase in the level of activity by Sea Shepherd, we have reduced, for the first time in a decade, to zero the number of Australian patrols in the Southern Ocean. And we seek to protect our interests only by a cooperative agreement with the French, in which the level of our participation amounts to one, two or three officers on a French vessel. That is what it amounts to, isn't it?

Rear Adm. Johnston: There are some differences between the Japanese whaling issue and the Southern Ocean patrols. Much of the focus for the Southern Ocean patrols that we have conducted is around the exclusive economic zone of the Heard and McDonald Island group, which is separate activity to that which the Japanese whaling fleet conduct.

Senator BRANDIS: Wouldn't you think that if the level of activity of Sea Shepherd and the number of Sea Shepherd vessels active in the Southern Ocean has increased at the moment, as you have told us it has, then that would be a reason for us to deploy more rather than fewer resources in that area?

Rear Adm. Johnston: Not necessarily, because we would have to be clear on the reason why we were deploying vessels to the Southern Ocean. You are aware that it is a hostile environment and we would have to have a clear understanding of the intent for such a deployment.

Senator BRANDIS: Who has the operational control of these French vessels? It is the French, isn't it?

Rear Adm. Johnston: I am not certain. It would be in that range. I could take that on notice.

Senator BRANDIS: You said before it was between one and three. So today there are at most three Customs officers looking after Australia's interests in the entire Southern Ocean, at a time when, as you have told us, there are more Sea Shepherd vessels than there have ever been before and the level of whaling activity, which, as we know, Sea Shepherd vessels are deployed to target, has not changed.

Rear Adm. Johnston: And we have our surveillance and other measures to monitor those areas.

Senator BRANDIS: It is all very well to surveil things, but, if you cannot do something to police and act on what that surveillance might tell you, that is not going to get you very far now, is it?

Rear Adm. Johnston: Not entirely so. I mentioned the illegal, unregulated and unreported fishing. In part through some of our surveillance collection, as vessels come out of the Southern Ocean we are able to track them through various means. We will collect evidence while doing so. For IUU shipping, we go through the Australian Antarctic Division and provide evidence which then goes into a group called CCALMR, Commission for the Conservation of Antarctic Marine Living Resources, who can take prosecution action.

Senator BRANDIS: We can watch and collect evidence. But that is not what we did a few years ago, when we had five patrols a year. In appropriate circumstances, we interceded, didn't we?

Rear Adm. Johnston: As threat levels warranted, yes.

Senator BRANDIS: But we now do not, because we do not have the capability to do that?

Rear Adm. Johnston: And we have not had incursions inside our EEZ.

Senator BRANDIS: But we do have, as you said before, an unchanged level of whaling activity, an unprecedentedly large number of Sea Shepherd vessels, no capacity to intercede, a nominal presence through French vessels—or a French vessel—and all we can do is watch and then make a complaint to the relevant international body.

Rear Adm. Johnston: Or we can collect evidence and exercise our jurisdiction, yes.

Senator BRANDIS: This question might be better addressed to you, Mr Pezzullo: you would be aware that the foreign minister announced on 17 December last year a four-point plan to fight people-smuggling. Has Customs helped deliver any of that plan thus far?

Mr Pezzullo: The short answer is: we are in the process of doing that. I will not repeat the burden of Ms Dorrington's evidence from earlier, before we had the break, in response to Senator Humphries, but in relation to the four-point plan we have got particular responsibilities to deliver in relation to some information sharing, some technical maritime cooperation and some public information communications-type campaigns. I might ask Ms Dorrington to summarise that earlier evidence.

Senator BRANDIS: If the evidence has already been given, do not worry. Just quickly, though: apart from developing plans, have those plans been yet put into operation?

Mr Pezzullo: Yes.

Senator BRANDIS: Have any of the assets envisaged by the four-point people-smuggling plan to be contributed by Customs been delivered?

Rear Adm. Johnston: As Ms Dorrington said earlier, some of the technical equipment that is to be delivered is still the subject of discussion. I think your question went to equipment. In relation to public information campaigns and information sharing, that is already on foot.

Senator BRANDIS: Thank you. Can I turn to illicit tobacco smuggling. Does Customs have an estimate of the value of the illicit tobacco market in Australia and, if you do, can you tell me what that estimate is, please?

Mr Pezzullo:I think we have been over this ground before. As I recall, I do not think we have an estimate, to use your characterisation, of that per se, but I will ask Ms Kelley to respond.

Ms Kelley: Customs and Border Protection have not estimated the value of the illicit tobacco market in Australia. We are also not aware of efforts by any other Commonwealth agencies to formally estimate the size or the value of the illicit tobacco market. At a recent Senate Legal and Constitutional Affairs Committee hearing, when the Customs Amendment (Smuggled Tobacco) Bill was under consideration, the Department of Health and Ageing advised that the 2010 National Drug Strategy Household Survey found that 4.9 per cent of smokers use loose, unbranded tobacco, commonly known as chop chop, and that 1.5 per cent of smokers use loose unbranded tobacco more than half the time. In addition, we are aware of two recent non-government estimates of the size of the illicit tobacco market . The first estimate was commissioned by the tobacco industry and was published by Deloittes in May 2012. It estimated the size of the illicit market in Australia as 13.4 per cent of the legal tobacco market.

Senator BRANDIS: Is that 13.4 per cent of 100 per cent or 13.4 per cent as well as the 100 per cent of the legal tobacco market?

Ms Kelley: The Department of Health and Ageing in the same committee hearing advised that it considers the Deloitte report contains a range of methodological flaws that led to substantially exaggerate the size of the illicit trade in tobacco in Australia. The second non-government estimate that we are aware of was published by Quit Victoria in May 2012. It estimated the size of the Australian illicit tobacco market as two to three per cent of the legal tobacco market. The Quit Victoria estimate is based on the National Drug Strategy Household Survey data, which I previously mentioned, and on relative seizures of illicit loose leaf tobacco and cigarettes data provided by Customs and Border Protection. Quit Victoria has previously provided its estimate on the size of the illicit tobacco market to the Senate Legal and Constitutional Affairs Committee as part of that committee's inquiry into the Customs Amendment (Smuggled Tobacco) Bill 2012.

Senator BRANDIS: Thank you. Can you tell me what have been the additional costs incurred by Customs in enforcing and advertising the reduction in the tobacco allowance which took effect on 1 September 2012?

Mr Pezzullo: That was something we did principally through our airport operations so Mr Buckpitt can deal with the matter.

Mr Buckpitt: I am struggling to find the right data, Senator.

Senator BRANDIS: While you are finding that I will ask another question. Has there been a noticeable increase in attempts to smuggle tobacco into Australia or to bring tobacco into Australia unlawfully since with the reduction in the allowance on 1 September?

Mr Pezzullo: And is there a nexus between those two matters? I think the answer to that question is no.

Senator BRANDIS: Sorry, you have posed to yourself a question other than the question that I asked you.

Mr Pezzullo: I am just trying to understand the question.

Senator BRANDIS: Just focus on my question and I will draw my own conclusions. Has there been, since 1 September, a noticeable increase in the amount of tobacco illegally introduced into Australia?

Mr Pezzullo: tobacco by tonnage; cigarettes by quantities, so million-stick quantities; and then the duty evaded figure.

Senator BRANDIS: Because time is running out, can you respond to that question by placing on notice those figures to which you were referring. Do they indicate that in the last four months of 2012 there was an increase on the comparable figures for the previous year?

Mr Pezzullo: Regarding the comparable period in 2011, the data does go back that far. I think that we will just place the data on notice. Just looking at it by eye, I would say that—if anything—the latter part of 2012, with the exception of one month, seemed to actually on the whole represent a decline in detections, tonnage, sticks and duty evaded. But we will get the month-on-month data.

Senator BRANDIS: Can you give us the figures for both September to December 2011 and September to December 2012?

Mr Buckpitt: The description is 'reducing the inbound duty-free allowance for tobacco'.

Senator BRANDIS: That is the line item which tells us the costs associated with the increased enforcement and advertisement of the reduction in the tobacco allowance?

Mr Buckpitt: That is correct.

Senator BRANDIS: Thank you very much. Has there been any increase in cigars smuggled or brought illicitly into Australia since the reduction began on 1 September 2012?

Mr Pezzullo: That one I will definitely have to take on notice. The data that I had before me was the tonnage of loose leaf and the millions of sticks metric.

Senator BRANDIS: Has Customs seized any illegal shipments of cigars in the past six months and, if so, how many?

Mr Pezzullo: I am just not sure that we get whole shipments of cigars. We will check, but the answer—being the recollection of the relevant competent officers—is that we cannot recall shipments of cigars.

Senator BRANDIS: I have got a number of other questions in the areas of the Tourist Refund Scheme, the topic of airport and passenger facilitation, cargo inspections and anti-dumping which, in view of the time, I will also put on notice.

Proceedings suspended from 12:30 to 13:35

CHAIR: I now welcome Professor Triggs and members of the Australian Human Rights Commission. Do you have an opening statement?

Prof. Triggs: We do not.

CHAIR: In that case we will go straight to questions.

Senator FIFIELD: Good afternoon. I believe, Mr Innes, you have some news today relating to your resignation from the government's Accessible Airlines Working Group. Would you share with the committee what action you have undertaken today?

Mr Innes: Senator, I advised the minister for transport yesterday that it was my intention to resign from the Accessible Airlines Working Group, and I am disappointed to have made that decision. However, as I said in my letter, this group—which was set up with the support of Minister Shorten when he was Parliamentary Secretary for Disabilities and Children's Services some years ago—has really, I think, failed to achieve any results of major significance in the three or four years that it has functioned. I said in my letter that I was not going to detail all the areas in which the group had not achieved, but I listed two. The first was an inability to address the issue of the two-wheelchair policy, which I have discussed at estimates on a number of occasions in the past. I feel that there should be a way for government to lead an investigation to try and determine what the number of people travelling in wheelchairs ought to be on various aircraft, in the same way that it has determined the maximum number of parents using prams ought to be travelling on aircraft. The government has not done that.

The other area in which I think government has really needed to regulate—and I have been saying this for some period of time—is in the area of assistance animals, and which assistance animals can travel on which aircraft and how those permissions work. Disappointingly, I felt that I had no option, given the resources available at the commission for my work but to devote my efforts to other areas. I did give the government the assurance that were there a process that had some clear goals and clear expectations I would be happy to become re-involved with government's activities in this area. I really do not think this group has been effective in addressing the access needs of people with disability travelling by air in Australia.

Senator FIFIELD: I guess I could not characterise your decision as anything other than dramatic, because you are known as someone who adopts a cooperative approach and who is more than reasonable in handling complex issues. I recall we have discussed many times the Accessible Airlines Working Group. The last couple of times that we have spoken you seemed to give the impression that it was working fairly well—that the issue was getting a good hearing.

So I am just wondering what the turning point was for you, or what the threshold was that you felt had been passed such that you had no option but to resign.

Mr Innes: Thank you for your comments. I do try to work in a cooperative manner, and in fact this is the first time I have taken an action such as this in my seven years as a commissioner. I do not think there was any one point. I suppose I am always optimistic that processes such as this group will lead to achievement and successful resolutions, successful compromises on the various issues involved. But I have been pondering over the last 12 months, really, the fact that whilst there has been a lot of talking at the group there has not been much commitment by government or the airlines to the issues in question. I think the airline industry has done a number of things on access issues for people with disability, and it was really happy to sit at the table and discuss problems that arise—and there are numerous problems that people with disability experience—but not really to go away and learn the lessons from that group and act upon them.

Government, again, has been happy to talk but not really happy to initiate actions, either encouraging voluntary commitment to results or encouraging regulatory solution or leading the way. Reports such as the Flight closed report, which I think came out before this group started, in about 2008 or 2009, list myriad issues that need to be addressed to provide an equal travel experience for people with disability. There was a brief there for the group, but it needed leadership from the secretariat and the department to start to look towards resolving the issues in that brief, and that just was not happening.

Senator FIFIELD: Who can fix this situation? Is it government? Is it the airlines?

Mr Innes: I hope—and I have suggested a couple of ways forward on the two options that I raised—that the minister now might reassess this process and perhaps put in train a different process that is more task- and goal-oriented and which perhaps takes a slightly narrower view rather than trying to canvass all the issues, and picks four or five issues that are of more importance and sets itself some goals and some time lines to remedy those issues.

So, I think it is largely a matter for the government. I would hope that the airlines would cooperate in those initiatives, but I guess that in other countries around the world—in the United States and in Europe, where airlines have not perhaps been prepared to be cooperative—regulations have been put in place, and that is always the last option available to government if cooperation is unsuccessful. But government needs to lead the process and say: 'Look, we'd like to sort these problems out in this sort of way. Can we do it on a cooperative basis or do we need to go via another path?'

Senator FIFIELD: The two-wheelchair policy does sound like something from the 1970s. I might just ask the minister at the table if the government has a response to the decision that Mr Innes has taken to resign from the working group.

Senator Ludwig: I have only just read the letter today. I will certainly seek advice from the Attorney-General as to what information he may be able to provide. In fact, it has gone to Minister Anthony Albanese. I do not represent him in these sittings, but I am sure I can seek a response from him as well.

Mr Innes: Sorry, Senator, I was about to say that it was not a letter to the Attorney. Otherwise—

Senator FIFIELD: No, I appreciate that; it is to Mr Albanese since it is a transport issue. But as an issue of accessibility and possibly discrimination, it is a matter that falls within the purview of the Attorney-General's portfolio and his representative.

Mr Innes: Sure.

Senator FIFIELD: I might just move on, before I yield to my colleague. Mr Innes, we now have a date for the federal election, and I know that you have been working closely with the Electoral Commissioner for some time as to ways to ensure that people who are blind and vision impaired can have a genuinely secret and private ballot. There were some arrangements in place at the last election which were, I guess, adequate but not perfect. I think you indicated a couple of estimates back that the Electoral Commissioner was at that stage drafting some regulations which would facilitate greater options for a private ballot for blind and vision impaired people. I will ask the Electoral Commissioner later today about that, but are you able to provide the committee with an update from your point of view as to how that is progressing?

Mr Innes: My understanding is that the arrangements for the forthcoming election will be similar to those for the 2010 election—that is, that a person who is blind or has low vision will register and will receive a PIN and identification number and will ring a call centre at the time that they wish to cast their vote and someone at the call centre, who does not know their identity, will take the details of the vote. As you are correct in representing me to say that I regard that as an adequate and not a perfect solution.

I think one of the challenges that the Electoral Commissioner has is that, if you look at the cost per head of administering a system like that, it is much higher than the cost per head of administering the standard electoral system. One of the ways to address that, of course, would be to broaden the range of people who could take advantage of a system which requires a pencil to be used with a piece of paper, either by broadening it to people with other disabilities who may benefit from that process, or by, as was done in New South Wales, broadening it to other classes of people such as people who are going to be out of the state or overseas. That way you would bring down the cost per head of setting up such a system.

I understand that that is a matter for politicians rather then for the Electoral Commissioner to do, though, so perhaps that is one remedy that is in the hands of politicians. But the absolute details of the process are probably a matter best left to the Electoral Commissioner rather than to me.

Senator FIFIELD: Sure, and I will certainly ask the commissioner about that later today. Minister, I thank you for taking on notice and noting that you will seek to provide a response to Mr Innes's resignation from the Accessible Airlines Working Group. I think you probably agree that it is quite a significant and dramatic thing for the nation's Disability Discrimination Commissioner to resign from a government advisory body out of—I don't want to put words in Mr Innes' mouth—frustration at progress on a number of issues.

Senator Ludwig: Thanks, Senator. I think everyone would think—and you included that it is disappointing that the Disability Discrimination Commissioner has decided to resign from this important work—that if you look at the range of work that this committee has done, it has been driving important changes; it has initiated the development and publication of disability access facilitation plans, which set out in detail how airlines and airports will meet the needs of passengers with disabilities, with 41 plans now in place, covering all of the four major Australian airlines and all capital city airport operators; they have developed guidance material for aviation operators to help with the training of staff to work with passengers with a disability; and developed guidance for disability passengers about the suitability of different models of mobility aides for carriage on aircraft.

As I understand it, the group will continue to monitor the implementation of the airport and airline plans. The government has also of course commenced a review of the disability standards for accessible public transport, with the release of an issues paper in November 2012. It also calls for submissions by 26 April 2013. And as I understand it that group will also be making submissions to the Transport Disability Standards Review. So it is with disappointment that we see Mr Innes no longer part of that group, but that group has driven change and the work that he has done on that committee has been significant.

Senator FIFIELD: Thank you. And I guess it is to be hoped that Mr Innes's actions helped to focus the minds of both the government and the airlines. Thank you, Chair.

Senator BRANDIS: Professor Triggs, I want to focus my questions on a broad issue about the commission's priorities. I do not know whether you have a copy of your act to hand, but I am sure you are very familiar with it. Can I remind you—not that you need reminding, but can I put it on the record, as it were—that the act defines the duties of the commission in section 10A in these terms:

(1) It is the duty of the Commission to ensure that the functions of the Commission under this or any other Act are performed:

(a) with regard for:

(i) the indivisibility and universality of human rights; and

(ii) the principle that every person is free and equal in dignity and rights …

And then in section 11, the functions of the commission are set out at some length in 16 subparagraphs. It talks about promoting public understanding and acceptance of human rights in Australia and so on. Human rights themselves are defined in the definition section, section 3, in these terms:

human rights means the rights and freedoms recognised in the Covenant—

that is, the International Covenant on Civil and Political Rights—

declared by the Declarations or recognised or declared by any relevant international instrument.

If we go back to section 11 and the specific functions of the commission, as you know, those functions are expressed, in the first instance, by reference to rights arising under the Covenant and also declarations or other relevant international instruments.

Professor Triggs, what has the commission done in the last year to promote Article 19 of the Covenant—that is the article which says:

1. Everyone shall have the right to hold opinions without interference.

2. Everyone shall have the right to freedom of expression; this right shall include freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media of his choice.

What has the commission done to promote freedom of speech and expression in the last year?

Prof. Triggs: Thank you, Senator. As you are aware, we have a comprehensive complaints system and we receive about 17½ thousand inquiries, 2,600 of which gel into formal complaints. Approximately, I believe, three a year concern political opinion. So it is a very tiny part, in answer to your question, of the complaints function of the commission.

Prof. Triggs: No, so if I could go on to complete my answer to your question. We inevitably take some lead from the kinds of complaints we receive, because we obviously want to reach as wide a range of Australians with concerns about human rights as we possibly can; so the emphases tend to lie in the very questions that Senator Fifield has raised in relation to disabilities or sex and race discrimination.

We promote the right to freedom of expression in our speeches and our media work where appropriate, and it has become particularly important in the area concerning the public discussion—that we have certainly welcomed—in relation to the current section 18C; in other words, what are the limits on the right to freedom of expression? This has been a matter—that we have debated, and I have discussed a little in the media—of trying to find a balance between the well-recognised importance of freedom of expression and political opinion and the limits that currently exist in the legislation, at least in relation to racial vilification.

I think perhaps I have two answers to your question. One is the role we can play in complaints, which has been small, but, in the public arena and in the educational context and the programs that we have for education, we very much support and talk about the right to freedom of expression, but we do so in the context of attempting to understand what the limits are in relation to racial vilification, particularly in the context of media, the internet and Facebook.

There is a third point I might make, and then I will finish this rather long answer. You might recall that, at our Human Rights Awards in December last year, we invited the Hon. Jim Spigelman to be our guest speaker, and he took up the question of what the proper limits are and how the balance is to be established between freedom of expression and the current racial vilification provision in section 18C of the Racial Discrimination Act. That sparked, through our Human Rights Awards, a very significant public debate, which you have been actively engaged in, Senator. We take some credit at least for having promoted public discussion in this area through our Human Rights Awards, although we would not want to take too much credit for that.

Senator BRANDIS: Mr Spigelman might have said what he said—and I agree with what he said—but what has the Human Rights Commission done? It provided a platform to a man who gave a speech—and I presume you did not know what he was going to talk about at the time you decided to invite him. That is right, isn't it?

Prof. Triggs: When I invited him, I did not, but, as the weeks went by, he advised me.

Senator BRANDIS: That is fine. I hear your answer, but what steps, what outlays from your budget, what staff deployments, what public education programs and what other activities have you had to promote, to evangelise, the message to the Australian people that freedom of speech and expression is a very, very important right in our democracy, which ought to be jealously defended?

Prof. Triggs: I think that the primary answer to your question, particularly in terms of the expenditure of our resources, lies in the work that we do in human rights education and the work that the team at the commission does in developing curriculum with the Australian curriculum board—I think that is not exactly their right title, but I can perhaps take this question on notice in part. Certainly that is where a very strong focus of the commission lies, in public education and working and developing human rights education as an integral part of the curriculum. In that context, I understand that we place quite a significant emphasis on the right to freedom of expression and political opinion.

Senator BRANDIS: Again, I hear what you say, Professor Triggs, but I have looked through the annual report—and, in fairness to you, the reporting period precedes your coming into office as the president of the commission—but I can find nary a word about freedom of speech or freedom of expression. It is all about antidiscrimination law and kindred values. I have no problem at all with the Human Rights Commission promoting antidiscrimination principles and conducting public education campaigns about the importance of equal treatment and the importance of discouraging racial discrimination, disability discrimination and so on, but, frankly, Professor Triggs, it seems to me from your most recent report that that is largely all you do.

By 'you', of course, I mean the commission. It is as if your agency is not really a human rights commission at all but an anti-discrimination commission.

You used the word 'balance', not me, and I am looking for the balance, I am looking for the programs that you run to promote freedom, liberty, freedom of expression, freedom of association—the very values that article 19 of the covenant enshrines and which, under your act, you have as much responsibility to promote as you do other articles of the covenant which the commission so zealously does promote and foster.

Prof. Triggs: I quite agree with you that of course our mandate is to promote human rights, and that concept—

Prof. Triggs: As defined by the act, which, in fact—as you point out—is the International Covenant on Civil and Political Rights, and those declarations that have been declared and others that have been recognised over time. We do that work without question. One area that perhaps we need to make clearer to the public is the very important international work that we do in the region. We are a leading 'A status' national human rights institution—and I can say this because I have only recently arrived; it is not something that reflects anything I have done. This institution is one of the leading human rights institutions, not just in the region but globally. I have seen that from my own experience. I think that we make a very significant contribution in that area. I believe we make a contribution in the field of education, and I would like to take it on notice and give you rather more information in regard to that. We play a media role whenever we can. However, I do come back to where I started: inevitably, some of our work—or the direction and focus of our work—is informed by the very significant level of complaints we have in some areas rather than in others.

Senator BRANDIS: I understand that, but it is a bit of an asymmetric comparison isn't it, because if a person feels discriminated against, for good or bad reasons, then that is the kind of grievance which will naturally provoke a complaint. But to suppress or discourage freedom of opinion or freedom of expression is something less immediate, because it is something that changes the culture of the entire country. There are, I suggest to you, few people who would feel it as immediately as a person who is the subject of unlawful discrimination in a particular case, because in a sense it affects all of us. So I think it is an asymmetric comparison

Prof. Triggs: Maybe, but it is a very powerful statistic that, while we have thousands of complaints in certain areas across the community, we have only three that relate to political opinion. So I do believe that, in fact, the freedom of expression is very strongly protected in Australia by numerous groups, by government and by our courts. That is a very strong right. The great difficulty in the public debate—and the extremely interesting public debate—is how do you achieve a balance that is acceptable to the public and that the public can understand. How do you legislate to prevent the intimidatory acts or acts of harassment that we have all been witnessing in the last few weeks and months? It is a very difficult question of legislative balance and we hope we have played a role with regard to achieving that balance.

Senator BRANDIS: It might be a difficult question of balance, Professor Triggs—and I know you are a very distinguished lawyer in this field with an international reputation, if I may say so, as a scholar of human rights law—but it seems to me that we are not wanting for the appropriate legislative foundation for your commission to undertake both the work that it does in relation to antidiscrimination law and kindred rights and the promotion of liberal rights, such as freedom of expression, freedom of association, freedom of religious worship and so on.

So I would suggest to you, Professor Triggs, that it is not the difficulty of the legislative balance. The legislative balance is already there in the act. You are directed to protect both categories of rights, what we might loosely or perhaps at the risk of overgeneralising call both libertarian rights and egalitarian rights. You are not wanting for the legislative basis to do that, nor is the ICCPR wanting for sufficient protection of both of those broad categories of rights. But all the emphasis as disclosed by the most recent annual report and, if I may say so, by your answers seems to focus the commission on the protection and championing of the egalitarian rights and the neglect of the liberal or libertarian rights.

Prof. Triggs: Senator Brandis, I think that is a very important question to ask us. I would like to go back to the commission and have this discussed within the commission to see whether perhaps—

Prof. Triggs: But I do have another answer, firstly to recognise the importance of your question but secondly to say that in many respects the commission does have one hand tied behind its back, because the legislation that applies here is legislation that, over the years, growing a bit like Topsy, has reflected international conventions to which Australia has become a party. We have, in the area of sex and disability and so on, given domestic implementing legislative effect to those conventions, and they have informed, of course, the work of the commission. However, the major international treaties, the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights and so on, have not been given domestic implementation. So it is not entirely surprising that the emphasis of our work has been on those areas where we have a clear legislative tool. As you know, one can go to the court holding that as a sword. You cannot go to any court holding up the International Covenant on Civil and Political Rights.

Prof. Triggs: If I may suggest, that is one reason why our emphasis has lain with working with the legislative tools that we have rather than perhaps emphasising the wider liberal values that you are describing that emerged from the early sixties with those major covenants. It is an important question, but I think in fact the question is now very much in the public arena, partly stimulated by this Human Rights and Anti-Discrimination Bill. It has shone a beam of light in an area of law where most Australians have not seen before, as we saw—if I may refer to Q&A last night—in the extraordinary level of public knowledge about specific provisions of this bill. It is being debated in a way that it has never been debated before in relation to issues that have been good law for 30 years but not generally understood. So I think that we are seeing a public discussion in an unprecedented fashion, particularly over the last two months, of the issues that you have raised.

Senator BRANDIS: That may very well be so, Professor Triggs, but why has it taken people other than the Human Rights Commission to elevate this debate? Why has it taken people like my friends at the Institute of Public Affairs, some of my colleagues in the coalition, columnists, editorial writers and writers of letters to the editors of the newspapers to get a debate up and going in Australia about limitations on freedom, when we have an agency, your agency, whose explicit statutory charter is to promote and advance those rights?

Prof. Triggs: I wonder if I could take another point here. I accept your question. I think it is a valuable one, as I have said. But let us look at another element of this—that is, a great deal of my time as president and that of many members of our human rights law and policy group has been responding to our profound concerns about the mandatory detention of asylum seekers. I understand that at the moment we have many thousands—and I do not know the exact number, but let us say 6,000 people—in mandatory detention in Australia, including children. Many have been there for years. Babies have been born within that environment. They have been charged with no offence, and they have not yet had their claims to refugee status assessed. That is an area that I think is of fundamental importance to human rights.

Prof. Triggs: It concerns arbitrary detention without trial. If I may say so, I went to an interesting lecture by the foreign minister the other day to celebrate the Magna Carta, quoting the fundamental principles of the Magna Carta that no man—or presumably woman—can be charged or held without a trial of their peers. It seems extraordinary—

Senator BRANDIS: I do not think the barons at Runnymede had friends like Mr Eddie Obeid and Mr Ian Macdonald, unlike our foreign minister, who speaks with eloquence about the Magna Carta, at least.

CHAIR: Senator Brandis, I am going to ask you now to concentrate on the additional estimates.

Senator BRANDIS: Thanks, Madam Chair, I take your admonition as I always do. Professor Triggs, I am not just making an academic point. I want to emphasise that. I understand your point about the claims on your resources, but it cannot have escaped you or the members of the commission that in the last 12 or 18 months or so in Australia we have had a very, very vigorous debate about freedom of speech. We could probably trace its origins, at least in the recent past, to the decision in the Bolt case, and then we had the Finkelstein report, which took—in my view—an expressly illiberal view of freedom of the press. It mounted a very specific and direct critique of classical liberal values and favoured a collectivist view of values. Then we had the draft of the Human Rights and Anti-Discrimination Bill. We have had the two national newspapers, the Australian and the Financial Review, in their editorial columns and in their opinion pages, agitating this issue on an almost weekly basis. Frankly—and this is not a personal criticism of you, Professor Triggs—the Human Rights Commission, as far as I can see, has been largely missing in action from this profoundly important national debate about one of the most important human rights: freedom of speech and expression.

Prof. Triggs: Senator Brandis, I think that you are looking at only one side of this coin, if I may put it that way. In other words, the other side of the coin is: how do the rules on racial vilification and limitations of freedom of speech impact on that right? Because the public debate has focused, as you say, stimulated by the Bolt case and by the Human Rights and Anti-Discrimination Bill and the Hon. Mr Spigelman's speech—

Prof. Triggs: we have had an emphasis on the proper limitations of freedom of speech. I think it would be fair to say that we have been very much in action over the last few months on this question, but we have not been emphasising the right to freedom of speech; we have been emphasising the way in which the balance in relation to it is established either under the current legislation or under the bill that is now proposed for the future.

Senator BRANDIS: I will just be a few more minutes, Madam Chair. But, Professor Triggs, that is the problem. You are not meant to be the agency that warns about the limitations of freedom. You are meant to be the agency that advocates for freedom.

Senator BRANDIS: No! There is nothing in the act or the covenant that talks about balance. You are meant to be the agency that advocates for freedom, just as you are meant to be the agency that advocates for egalitarian rights as well. Let the political process and public discussion find where the balance is, but it seems to me, with respect, that you go into this discussion with one hand willingly tied behind your back, not as the advocates of freedom but as the discussants of freedom. You are not meant to be the discussants. You are meant to be the advocates. That is your statutory charter. Whereas your commission is a dedicated and committed advocate of antidiscrimination principles, I do not see the commission being a dedicated and committed advocate of freedom principles. You have think tanks, like in the Institute of Public Affairs, which has something called a 'freedom project'. I do not see a freedom project in the Human Rights Commission.

CHAIR: Senator Brandis—

Senator BRANDIS: Can I have an answer to my question, please, because I am inviting the witness to respond.

CHAIR: I was not sure whether it was a question or the opening paragraph of your next speech. If that is the case—

Senator BRANDIS: We are entitled to put observations to the witnesses and invite their response.

CHAIR: I am not sure about observations. We have a Senate chamber where you can do that. We are really pressed for time today so I am going to move to the next senator in a minute.

Prof. Triggs: Exactly. Our role—and my role as president of the commission—is to state the law as accurately as we can, and as we can understand it. I am talking about human rights law as defined by the act. We attempt to do that. I think in the main we get it right. We have a obligation not only to state the right to freedom of expression but also to state the law that exists, in legislation and in the treaties, that prohibits racial vilification.

Prof. Triggs: So, when we present these arguments we are attempting to understand that we have rights that must be balanced against each other. And we have to, perhaps, advocate for ways in which we think that balance can be achieved. You are not happy about the way in which we are finding that balance, and I will certainly take your question back to the commission and ask for some discussion about it. But I think it is wrong to say that we have not been out in the public arena playing a role in this discussion. Indeed, if I may say so, I think we stimulated it in early December.

Senator BRANDIS: My last question. Your commission does seem to have a superabundance of discrimination commissioners in various areas. Should the Human Rights Commission have a freedom commissioner whose particular brief is to promote the kind of balance of which you speak so that within the commission there is a person whose particular job is to promote freedom, just as, within the commission at the moment, there are, I think, five commissioners whose particular job is to promote antidiscrimination? Would that not be a desirable balance—one freedom person versus five anti-discrimination people?

Prof. Triggs: We would be delighted to have a new commissioner to deal with notions of freedom. It is highly unlikely in the current climate. As I said, in all good faith we will take your question and look at it back in the commission to see if, maybe, we can put some more thought and resources into the liberal concepts or principles that lie behind the freedoms that you have been describing.

Senator PRATT: I do; thank you. I note that there have been some proposals floated as a result of some of the public debate to repeal racial vilification laws. You would be aware of such proposals.

Prof. Triggs: Indeed.

Senator PRATT: Would such a repeal strike the balance that you think we should be seeking to strike on these issues?

Prof. Triggs: I do not believe so. Within the commission we have discussed this. It is not my job to talk about what I believe but, basically, where we have come to in terms of the law. There is an obligation at international law to adopt laws domestically on racial vilification. However, I think, in relation to 18C we have possibly gone too far in including the language 'insulting' and 'offending'. I have made that point very clearly in an opinion piece published in one of the newspapers.

We have talked a great deal about this, as you can imagine, within the commission, working with the Attorney-General's Department over the draft. We do not entirely agree on this question but basically we take the position that we should have a provision on racial vilification. It has its place, and I think that is amply demonstrated by the incidents literally over the last few days. I think we would all agree with that.

The question is in the legislative task of what language you use. 'Intimidating', 'humiliating', 'vilifying' is language that I think most Australians will certainly understand and be sympathetic to. But the language of 'offending' and 'insulting' simply put the threshold too low, in our view. So we would like to see reform, in due course, of that provision.

Senator PRATT: What you are talking about are the new provisions that apply across the whole of the Anti-Discrimination Act as opposed to the repealing of the notion that the racial vilification laws should themselves be repealed.

Prof. Triggs: Yes.

Senator PRATT: What I am concerned about is that people would be without recourse under such proposals to pursue in the courts statements such as, 'Jewish people who are offended by and challenged by the Holocaust denial are of limited intelligence.' They are not the kinds of statements that I would necessarily like to see being protected by freedom of speech when they are not specifically directed towards people in the community to cause them harm.

Prof. Triggs: Are we talking about the proposed bill?

Senator PRATT: What we have, in either the proposed bill or the existing law, is a public debate that those provisions on vilification should be repealed.

Prof. Triggs: I would suggest that were we able to reform 18(c) or the new 51 under the bill, to perhaps elevate the language to the more egregious circumstances, then I would think that we were coming closer to finding the right balance.

Prof. Triggs: In the bill they do—in other words, section 19(2)(b) has the words 'insulting and offending' in relation to a list of attributes that were in the ILO Convention. That is much more open-ended and not couched by the same objective standards, apparently, as 18(c). One would have to make a clear distinction. Under the proposed bill, then I would suggest that there is a much greater capacity to catch language that would be at this lower threshold of 'insulting' and 'offending'.

Prof. Triggs: In general, because the bill proposes a much wider range of attributes.

Senator PRATT: That is right but if 18(c) ends up being amended, we are not also talking about watering down racial vilification here, are we?

Prof. Triggs: No, 18(c) concerns race related offences.

Mr Wilkins: It is part of the bill that is out there for discussion, but I do not think that anyone is actually talking about changing that.

Senator PRATT: We note that there has been debate not only about the Bolt case but also about the recourse of a number of communities to anti-vilification law for anti-Semitic views and a range of other unpalatable views. Are you able to give us an outline of some of the kinds of racial discrimination complaints that the commission receives?

Prof. Triggs: I would like to take that on notice in part, if I may. I should say that 19 per cent of our complaints concern racial discrimination. I would have to come back to you on precisely how many would be in the context of racial vilification, but I can say that it is a significantly rising number. I checked this just the other day and I think that we had almost a doubling of complaints of race hatred, which is definitely a significant increase over the last three or four years. I think it has gone from something like—and I would like to take this on notice—50 a year to 120 or 130.

Senator PRATT: Although it probably does stray into the bill that is before us, my question relates to section 51 of the Human Rights and Anti-Discrimination Bill. As I understand it, it reflects the current 18(c).

Prof. Triggs: Yes.

Senator PRATT: They relate to Senator Brandis's line of inquiry suggesting there is a great restraint on free speech in this country. It seems to me we are having a debate about 'insults and offends' in one part of the act quite separately to the issue of racial discrimination. And yet there are those entering into this debate who are conflating the issues. You have talked about the need to look at winding back some of those provisions that relate to new attributes. I would like to get you on the record, Professor Triggs, on your views about that in relation to racial vilification and whether you advocate that we also water down 'insults and offends'.

Prof. Triggs: To be as clear as I can about this: 18(c) in the current law talks about offending and insulting, intimidating and humiliating on the grounds of race.

Prof. Triggs: In the bill that provision has been brought across, I think largely in whole, to the new proposed clause (51). That has not changed. You are quite right. A lot of people are conflating 51 with 19(2)(b), which raises different issues. Sticking to the new 51 or the old 18(c), I think there is an argument to say that the balance among freedoms is better achieved by taking the words 'offending and insulting' out of that legislation. But reasonable minds will differ on this, and I am not saying this from a perspective that the law requires or international law would require. I am not elevating it to that level at all. I am simply saying that, in light of the public debate and the confusion that has been created around this, it should at least be considered that those words be deleted. One reason for saying that is that if you look at the cases that have come before the Federal Court, there have been very few and they have been egregious cases. They have been shocking cases, in fact. If you go back and read the views—

Prof. Triggs: As you obviously have. Toben in particular, but the Aboriginal means one would shock every Australian and I do not think anyone would have any doubt that that was not at the lower end of insulting and offending—it was at the much higher end—of genuine racial vilification that I do not think a modern democratic society has to tolerate. It is how to find that balance.

Senator PRATT: That is not a matter of free speech and we do need a provision in our discrimination law to protect—

Prof. Triggs: Exactly. Freedom of expression does not go to allowing that kind of vilification of people on the grounds of race.

Senator PRATT: As Senator Brandis put it, he is arguing for freedom of speech, and there are proposals to repeal racial vilification laws entirely. I have heard such calls from both the House of Representatives and the Senate at times. That, surely, would be a step too far.

Prof. Triggs: I believe it would. In answering your question on this matter, I am on firmer legal grounds in the sense that there is an obligation in the Convention on Race Discrimination to adopt domestic laws on racial vilification, however defined. I think it would be a retrograde step to withdraw it completely.

Senator HANSON-YOUNG: Your report issued on 13 December goes through a number of recommendations—13 I believe—specifically in relation to Christmas Island. Have you had any response from the government in relation to those specific recommendations?

Prof. Triggs: I do not believe we have. I wonder if I could just take that on notice to check to make sure, but I do not believe we have had any responses.

Senator HANSON-YOUNG: In the thrust of that report you are obviously very concerned with the overall appropriateness of the detention facilities—both the North West Point facility and the construction camp, where families are kept. Have you been able to meet with the minister directly to discuss your concerns?

Prof. Triggs: I met Minister Bowen before I went, and I have not been able to discuss it with him personally since, but I have a meeting tomorrow with the new Minister, Mr O'Connor, on these questions, and I certainly will be raising them and also our concerns about the bridging visas and the nature of those visas.

Senator HANSON-YOUNG: What is the commission's view about the work restrictions for people who have been found to be refugees and put on bridging visas but are not able to work in the community?

Prof. Triggs: Our position with regard to the bridging visas is essentially that there is a right to work as a matter of international law, the International Covenant on Civil and Political Rights and economic and social rights. So broadly speaking there is a right to work at international law. That is certainly the case with regard to refugees—those assessed to be refugees. For those who are asylum seekers, there can properly be some restrictions on those rights, but we believe as a matter of law that asylum seekers are entitled to non-discriminatory treatment and to a humane existence within the society in which they find themselves. That, we believe, would include the right of access to work. So we are deeply concerned that this limited bridging visa impedes the opportunity for asylum seekers, and certainly refugees, to rebuild their lives and to make a contribution to Australian society.

Senator HANSON-YOUNG: Going to the issue of offshore processing centres—Manus Island and Nauru. Has the Human Rights Commission visited either of those facilities as yet?

Prof. Triggs: I had some correspondence with Minister Bowen. He by letter agreed to facilitate our visit in due course. But since that time—and his willingness to facilitate a visit—we have become aware of a doubt as to whether or not we have jurisdiction in relation to offshore facilities. The commission has a legal view on this matter that has yet to be clarified. What we have agreed to do with the Attorney-General's Department is to request the advice of the acting Solicitor-General as to the extent of our jurisdiction. If that advice is that our jurisdiction will extend to the acts for and on behalf of the Commonwealth or acts over which we have effective control in those offshore islands, then it is my intention as quickly as possible to visit them.

There is a slight difficulty from the commission's point of view in that we are receiving complaints, and I cannot hold out any hope to the people held on those islands that we can handle those complaints, in the current environment. I do need clarity as to the extent of our jurisdiction.

Prof. Triggs: I believe that a draft is close to being developed and I am hoping that a final will be available within the next two or three weeks.

Senator HANSON-YOUNG: Who raised that with you as an issue? Was it brought to your attention by the Attorney-General's Department or by the government of PNG?

Prof. Triggs: It was brought to my attention by the Attorney-General's Department.

Senator HANSON-YOUNG: Are you aware of any discussions that the Attorney-General's Department or the government has had with the PNG government around allowing you to visit, regardless of the grey areas around your jurisdiction?

Prof. Triggs: I am not aware of any discussions of that nature. I think it would be imperative that I have some clarity on the question of jurisdiction, partly for the ethical reason I have raised. It would be quite wrong of me to go and create an expectation that the commission can act when we might ultimately find that we cannot. It is certainly very frustrating from our point of view. We feel that as the national human rights institution we ought to be there. But at the same time we of course have to act within the terms of our own mandate under our act.

Senator HANSON-YOUNG: How does that view fit with that of the United Nations refugee commission, the UNHCR. They recently visited Manus Island and last year visited Nauru and, in their view, this is all still Australia's responsibility. Have you conferred with your UN partners in terms of that particular question?

Prof. Triggs: I have not conferred on any formal basis at all with United Nations bodies or with the UNHCR, but we have formed our own tentative view on this question. There are two ways of looking at it. One is: what would the position be at international law with regard to Australia's responsibilities for assessing and managing asylum seekers on Manus and Nauru? I think the answer to that is actually quite clear. But the much more difficult question is: what is the statutory reach of our jurisdiction under the act? That is the issue that needs to be clarified. And on that second point I should say that international bodies probably would not be able to make much of a contribution.

Senator HANSON-YOUNG: Have you read the report that was issued by the UNHCR last Monday in relation to the Manus Island detention centre?

Prof. Triggs: Yes.

Senator HANSON-YOUNG: They make a number of recommendations in there. One of the clearest recommendations is that they believe no more children should be sent to the island. What is the commission's view on that?

Prof. Triggs: We completely agree. The Convention on the Rights of the Child indicates that the interests of the child are a primary consideration. I think we all know that very well. How it is interpreted is of course a matter of judgment. But in our judgment it is an egregious breach of human rights law to send children to these islands, even with their families. It breaches almost every right you can think of in the Convention on the Rights of the Child. We cannot speak more strongly than in relation to children. But, again, I have to be very cautious in the sense that we have to resolve the question of jurisdiction.

Senator HANSON-YOUNG: One of the things that struck me the most when I visited two weeks ago was how degrading the facilities themselves are: the fact that there are no doors on the toilets and that for two months there have been no doors on the families' rooms. There seems to be a lack of attention to what those basic standards mean in terms of providing these people with a humane space that respects their dignity. How does that lack of dignity fit within the human rights regime?

Prof. Triggs: In some ways that is the most important word in human rights law, because ultimately all human rights law comes down to the dignity of the human being. This is not sophisticated law. It is very straightforward. It is law that was devised in the years after the Second World War. We are distressed, of course, as a matter of law, to see that Australia should have created a regime that exposes people to these indignities. However, the commission certainly respects an objective of the government to save lives. However, the difficulty with this very important objective is that to use offshore processing as a mechanism for deterrence is entirely contrary to the spirit and letter of the refugee convention and the general customary international law that supports the right of asylum seekers to claim asylum. So, it is a very difficult policy question, but all we can do at the commission is reiterate the core principles of international human rights law, and they would at minimum be that people are to be treated with dignity as human beings.

Senator HANSON-YOUNG: In talking to individuals who are detained there, one of the other troubling questions is why they have been chosen. Out of the 10,000 people who have arrived in Australia by boat since 13 August, only 500 of them have been picked to be sent to Nauru or Manus Island. Children—one young boy is about 10—asked me why he and his mum and dad had to be sent to Manus Island out of all the other families on his boat, and there were 90. How do we deal with the arbitrary nature of that type of punishment?

Prof. Triggs: One legal answer is that at law it is prohibited to discriminate against people in their treatment, as we do under the current legislation with those who are unauthorised maritime arrivals in contrast to those who arrive at the airport without visas, for example. Although how that happens I am not entirely sure, but nonetheless it clearly does. That is a discriminatory treatment, and it is equally discriminatory to take some for offshore processing and not others. How that is determined we do not know. That is non-transparent. But certainly in my experience Christmas Island was very much the same. People were very concerned about whether they would be transferred to Australia ultimately or whether they would be transferred offshore, because by the time I was there they were well aware that this was a significant risk. As a matter of law the answer to your question lies in the prohibition of discrimination. But, also, I think the law would require some level of transparency in their treatment, and I think we do not have that at the moment.

Senator HANSON-YOUNG: When the immigration department appeared before this estimates committee hearing yesterday I asked them what in fact the criteria are for choosing which people are sent and which are not. They were unable to give me any tangible explanation, except that it depended on which translators were available. I asked whether this was written down somewhere in terms of protocols. No-one seems to know, which indicates to me that it is not. Any pushing of any of that information being put on the public record was put as an operations matter. That indicates a total lack of transparency as to why somebody is chosen over somebody else.

Prof. Triggs: It is a matter of great concern. Also, the use of human beings, including children, to achieve a deterrence policy raises, certainly, legal questions in the context of the rights of the children but also the rights of the family and the rights of all human beings and for asylum seekers to be treated in a humane and rule-of-law based process.

Senator HANSON-YOUNG: Those are all the questions I have. For the committee's information, when you do have the information about your jurisdiction it would be very helpful to know for the next estimates session whether that is in your commission's gamut.

Prof. Triggs: Thank you very much. Perhaps I should say that I may have incorrectly answered one of your questions with regard to whether we have received a response from Minister Bowen with regard to Christmas Island. I think we might have done. For the moment, I am grasping to think of whether we actually did. It may have been in letter form and I have momentarily forgotten it. So I may want to correct the record if I have in fact answered your question incorrectly.

Senator SIEWERT: I have questions for the Disability Discrimination Commissioner, the Aboriginal and Torres Strait Islander Social Justice Commissioner and the Age Discrimination Commissioner. I will start with you, Mr Innes. I saw the outcome of the BSWAT test for workers of Australian Disability Enterprises and the finding that it was discriminatory. Can I just explore some of that now?

Mr Innes: Certainly.

Senator SIEWERT: Have you provided any advice to government about reforming that tool, improving that tool, or using an alternative tool?

Mr Innes: There are two court decisions which were made in this matter, the first by a single judge of the Federal Court and the most recent one by the full Federal Court. The first decision found that discrimination had not occurred, but that was overturned by the full Federal Court. I note that the government has sought leave to appeal that decision to the High Court. I have not provided formal advice to government, but I have certainly commenced discussions with government to express my disappointment at the decision to appeal that matter. It seems to me that perhaps a better course of action might be to look to addressing the issues which the court has pointed out occur in the current wage assessment tools and trying to remedy those issues rather than further extending the argument, at significant cost to applicants who are people with disability and represented by a not-well-resourced legal centre, rather than pursuing those matters in the High Court, particularly given that the disability services in question will, over the course of the next few years—subject to decisions currently before this parliament—transition to becoming part of the National Disability Insurance Scheme services. It seems to me an appropriate time to look at these wage assessment tools and look at resolving the issues which the court has suggested take place rather than further pursuing the argument.

Senator SIEWERT: I will obviously raise with the department in estimates on Thursday the position around the appeal, but have you had complaints about the use of this particular tool?

Mr Innes: With the matters that were determined by the Federal Court, that case followed from complaints lodged under the Disability Discrimination Act. Do you mean have we had further complaints?

Mr Innes: I would need to take that on notice, but this is an issue that is regularly discussed in the disability sector with people with whom I talk, and it has certainly been one where the sector has been watching the complaints which were lodged. It is similar to when one complaint is sort of blazing a particular new trial or path, and people wait to see the result of that complaint before pursuing the issue themselves. The fact that there may not have been many or any other complaints does not necessarily mean that there are not significant concerns in the sector about this issue, and probably more broadly, about the level of wages earned by some people in ADEs.

Senator SIEWERT: I understand the point about watching what happens. Can I go back to the government appealing. Did you say that they did talk to you or they did not talk to you before they lodged that appeal?

Mr Innes: No, I did not have discussions with government prior to that decision on this issue.

Senator SIEWERT: You have spoken in the past about the issues around the competing needs and the viability of certain business models and a fair wage. Is it fair to say that the government has an interest here because of their funding for ADE?

Mr Innes: That is true, but I think the government's interests are somewhat more complex than that. I think they also have interests in being the authors and the co-authors of the various wage assessment tools because this decision brings into question the validity of not just the particular tool in question but, it has been suggested to me, the other wage assessment tools as well. So there are some issues there and potentially some liability issues the government would need to weigh—and I understand that—as part of their decision.

Senator SIEWERT: Would there be an alternative model that you would propose to be used? I am thinking particularly in context with the comment you made about the move to an NDIS.

Mr Innes: That is a very complex question. I cannot say that I could now outline an alternative model. The Disability Discrimination Act provides for an exemption, and so people are allowed to discriminate on the basis of disability in terms of wages that people in these enterprises earn. That decision is based on the capacity of the person to carry out usually a percentage of the job that might be carried out by someone without a disability. It is a very complex thing to have to measure that. I think there will need to be some work done by people in the industry, perhaps including the commission, to tease out an appropriate method which does not discriminate as the full Federal Court has found this one currently does.

Senator SIEWERT: While the government did not talk to you before they sought leave to appeal on this particular issue, have they sought any advice yet around the broader issues, as you touched on, and the need to address this issue in light of the NDIS?

Mr Innes: I have raised this issue with government in the past few days and it is the subject of current discussions.

Senator SIEWERT: I have another question around the new process for disability support pensions and the 18-month waiting period for access. It is not called that, but it is the period of time when people have to prove that they have tried to find work and cannot and then they can be assessed for the disability support pension. Are you aware of the change that came in last year?

Mr Innes: Yes.

Senator SIEWERT: We have talked about it before. Have you heard any complaints about this particular piece of legislation?

Mr Innes: Again, whether actual complaints have been lodged I would need to take notice. But I would say to you that there is a relatively broad exemption for social security legislation in the Disability Discrimination Act, as there is in a number of other similar pieces of legislation administered by the commission. So the fact that there have not been many, or any, complaints may be as much due to the fact that people are not confident that raising a complaint with the commission would constitute a valid complaint because of that exemption in the legislation. These sorts of decisions have been exempted from the DDA right from the start because they are viewed as matters of government policy.

I would only say that I think it is really important to do what the government is doing, which is working towards maximising the participation of people with a disability in the Australian workforce.

It is only by doing that that we will maximise the contribution that people with a disability can make in Australia. We, as a community, set the bar low in this area and so we do not maximise the contribution. I am very supportive of any attempt by this or other governments to maximise the opportunities for employment and to maximise the employment of people with a disability in the Australian workforce.

Senator SIEWERT: Have you looked at any impacts of the changes to the social security provisions, and whether they have been successful in enabling people to find work?

Mr Innes: They are part of a broader package. In themselves they are not going to make a major difference, but they might in the broader package of activities that the government is involved in to encourage employment of people with a disability. I have been involved with government and continue to be involved in advising them, and I think some things they are doing very well and other things they are not doing so well.

One of the things government needs to do, as I have said here before, is lead by example in its own workforce. At the moment the percentage of people with a disability in the Australian Public Service is 2.9 per cent. That is a shameful situation which needs to be addressed. The Public Service Commission has developed and is implementing a strategy to address it. The strategy does some good things but I do not think it goes nearly far enough towards addressing the issues facing people with a disability. Given the significant disadvantage that we face in employment I think that government needs to set targets in departments for the numbers of people with disability who are employed in those departments, and those targets, along with a whole lot of other key performance indicators, should be related to the salaries of senior departmental officers.

Senator SIEWERT: Over several estimates we have touched on these issues and I have heard you speak publicly about them before. How far have you progressed in discussions about setting targets and actually achieving those targets?

Mr Innes: Over the time I have been discussing them—that would be four or five years at least—I think there has been a greater recognition that other methods of improving the level of employment for people with disability are not working and that maybe targets are the next step. I think we are getting closer to the goal. I would say that is true both of government and of the private sector. I would say there has been progress but we have not got over the line on that one yet.

Senator SIEWERT: I will put on notice a couple of other questions on that issue. Ms Ryan, I want to ask some questions about issues I have asked you about previously, particularly concerning the review you have been undertaking around employment. How many complaints have you had recently? You updated us last time about that, and the highest proportion of those had been in employment, again.

Ms Ryan: It is still the case. I think close to 70 per cent of the complaints under the Age Discrimination Act are about employment. Of the total complaints handled at the commission, eight per cent concern age discrimination. The actual numbers are in our annual report, or I could provide them, but I do not have them in my head.

Senator SIEWERT: You were conducting some research through Deloittes that found some quite amazing facts. Whereto from here with that research?

Ms Ryan: That research measured the effect on the national economy of increasing the participation in the work force of people over 55.

They found an increase of just three per cent in over-55s would have an annual impact on the budget of $33 billion and an increase of five per cent would have an impact of about $48 billion. The purpose of our commissioning that work from Deloitte was to really make an impact on the thinking of those who can determine employment practices. They were released at a major conference—we called it the CEO Conference because we wanted to get the decision-makers in the private sector particularly engaged in this. Of course we had a lot of public sector decision-makers present, too. Since then, I believe there has been some movement. If you look at the ABS statistics on employment rates of people over 55—some were release just before Christmas—you will see that they show a distinct increase in the number of people over 55 in the workforce. Having said that—and that is satisfactory to all of us—it is still a very low base. We are still very low in terms of OECD performance as to the participation of men and women over 55. I am hoping to go back to the particular human resources experts who attended that conference within the 12 months and ask whether they will report what changes they have made in their own organisations. I expect there will be some improvement; I expect there will be room for a lot more improvement.

Senator SIEWERT: You are part of the age barrier inquiry that the Law Reform Commission is undertaking.

Ms Ryan: The report will go to the Attorney-General in March. As I sit here waiting for the final draft to come to me for my input, the process has been, I think, admirably comprehensive and that is due particularly to the team at the Australian Law Reform Commission and President Ros Croucher. They have travelled around the countryside and done extensive consultations. I have taken part in consultations with them but not the full extent of them. Anybody who wanted to make their views known would have done so. There is a great deal of interest because many of the barriers for mature age participation stem from Commonwealth laws and practices. By March I think we will have a report which is going to be of great interest to you, Senator, and everyone else who takes an interest in what we can change—in this case, what the Commonwealth can change—to improve the opportunities for mature age people to participate in the economy.

Senator SIEWERT: Is that looking specifically just at legislation or also at policies?

Ms Ryan: Also policies.

Senator SIEWERT: So it is a comprehensive approach to what you can do to address barriers?

Ms Ryan: Yes and the definition is, first of all, that it is Commonwealth laws, policies and practices and also it is those practices which are barriers to employment and other economically valuable activities such as volunteering. It does not cover every form of a barrier to a mature aged person but an economic barrier. We are looking at all of that and I think you will find a great deal of food for thought and we hope action arising from it.

Ms Ryan: I have looked at them, partly prompted by a question from you at an earlier estimates committee when I was very new in this role. We have looked at the job services provided to people who lose employment and in the submission we made to the Senate committee inquiring into the adequacy of Newstart, we made quite a lot of recommendations as to how those job services could be redesigned because they do not, at the moment, meet the needs of the older worker who has lost their job but who is, at that point, not entirely without assets. If they have some assets, they have to spend months or perhaps even a couple of years running down their assets before they are eligible. It seems to be totally contrary to the purpose of job assistance schemes. In a nutshell, my view was that assistance to the mature aged person looking for work should be available as soon as they lose their job. Details of that are available in our submission to that inquiry.

In a nutshell, my view was that assistance to the mature-age person looking for work should be available as soon as they lose their job. Details of that are available in our submission to that inquiry.

Ms Ryan: We are engaged in a lot of discussions with the TAFE system about how TAFE might provide much better targeted job retraining for the mature worker. We have been having some fruitful discussions with the TAFE system, because a lot of TAFE courses are not specifically designed for that purpose, and we are trying to get a focus on what happens to the 55-year-old person who loses their job and what TAFE offers them, not just by way of an interest course but a job-appropriate training course. So we are having a lot of discussions, and I hope we will have some results to report to you before too long.

Senator SIEWERT: Thank you very much. I am really looking forward to seeing that report. Mr Gooda, I wanted to ask you some questions about the current debate over the alcohol restrictions and then a few questions on income management. On the current debate over the alcohol restrictions, have you had a look at the drinkers register? There is debate going on about the usefulness of that. If you have, have you reached a conclusion about its effectiveness or not?

Mr Gooda: We looked at that during the preparation of our submission to the Stronger Futures legislation last year.

Mr Gooda: It was fairly new, yes. We have not done anything more on it since then, basically, because we came out in support of it. We supported it for a couple of reasons. One was that it had the potential to decriminalise the offences of taking alcohol in certain places. There were triggers around people being referred to the Banned Drinkers Register. There was a tribunal set up to look at examining each person who was referred. I know the chairman of that pretty well. He had lobbied for things not only for the local community. For instance, in Alice Springs, if there were people from the Warlpiri mob being referred to the Banned Drinkers Register tribunal, they would have Warlpiri people on the tribunal with them. Importantly, he was lobbying for the appropriate rehab services to be put in place. Our anecdotal look at it, if you want to call it that, was that it was starting to have an impact. I have said several times since the election that I was disappointed that we could not have gone further with that to see where we ended up, but of course it actually showed great potential to address that problem in the Northern Territory. Perhaps I can also add that I think the great benefit of it was that it was treating individuals who had a problem, not treating whole communities—a broad-brush approach across each community.

Senator SIEWERT: I heard you talking also about rehabilitation. One of the arguments here is that we are taking the money from that to put into rehabilitation because it is a better approach. Shouldn't we be doing both?

Mr Gooda: Absolutely. I think the Northern Territory government's answer is we are developing boot camps, and that is where this rehab will take place. You still have to have a means of referring people to that boot camp; it cannot just be an arbitrary decision of police, for instance, to refer people there. That is why we looked at the operations of the tribunal, and they were looking at basing a whole lot of their work around the Family Responsibilities Commission in Cape York. While there is one Family Responsibilities Commission, all of those four communities have community commissions. So we thought it was heading in the right direction.

Senator SIEWERT: I suppose that takes me onto my next question, and that is that this whole debate seems to be occurring without any formal consultation process with the communities that are affected. Whether you are removing controls or putting more in, there can be the same criticism that a number of us have levelled before. When the restrictions were put in in the first place there was no consultation; now they are being taken off without consultation. There has been comment in the media but not a lot of consultation with the communities affected, either way.

Mr Gooda: I said at the last hearings that I attended that I was not arguing one way—for restrictions to be put in or for restrictions to be relaxed—but what I was arguing for was Aboriginal and Torres Strait Islander people to have a say. And I still maintain that position, whether it is the imposition of alcohol restrictions, the relaxation of alcohol restrictions or the abolition of something that seems to be working.

Senator SIEWERT: Thank you. Have you been consulted for advice, by the state or territory governments or the Commonwealth, in terms of their ongoing approach?

Mr Gooda: We made our position fairly clear, again, in our submission—that is the Human Rights Commission submission to Stronger Futures—

Senator SIEWERT: That is to the Stronger Futures inquiry. I am now talking about the application of that particular legislation and the subsequent moves to change the controls.

Mr Gooda: In the case of the Northern Territory we have been briefed. We continue to have meetings with the department about how they intend to implement the alcohol management plans, because that is what they are talking about in the Northern Territory. It is in the legislation. There will be alcohol management plans. We have expressed some concerns. Again, the alcohol management plans talk not only about relaxation of the bans but a whole comprehensive approach in dealing with alcohol, including rehab services. And it seems to us that it puts all the emphasis on the community to provide those sorts of services. A whole range of services have to be put in place and we know, from a vast range of experience, that the communities do not have authority. They do not have the influence with departments to be able to put those things in place to have an alcohol management plan. So we committed to continue to work with the department to make sure the implementation of alcohol management plans were done in a way so that communities were involved, that the most vulnerable in the communities—the women, the children, the elders—were being heard. So that has been our general approach in the Northern Territory.

With regard to Queensland, they are going through a process of reviewing the alcohol management plans. We are basically pushing the same view with the Queensland government. Again, we are not arguing for the relaxation of bans one way or the other; we are mainly pushing a view that Aboriginal and Torres Strait Islander people in that state should have a say.

Senator SIEWERT: One last question in that particular area. Did you raise the issue or have any consultation with the minister about the use of the alcohol powers under Stronger Futures in terms of the powers that can look at how hotels are using licences? I am talking about animal bars and the decision now to look at the alcohol bars in Alice Springs eight months after the powers were granted in the first place.

Mr Gooda: I recall—I could correct this once we have a look—that we supported that power that the federal minister has. As a matter of fact, I think we recommended a strengthening of it—to limit the reasons why the Northern Territory government could refuse to do it.

Senator SIEWERT: Were you consulted about the use of the powers—how to use them or whether they should be?

Mr Gooda: No. Not yet. We made our submissions and we have not had any discussions about that particular aspect of Stronger Futures.

Senator SIEWERT: It seems to me that it is one of the powers that should have been used earlier. I am just wondering whether there was a reason why it was delayed. Are you aware of a reason why the use of that particular power was delayed?

Mr Gooda: I could not answer that.

Senator SIEWERT: Can I just quickly ask you about income management. Have you looked at the two reports that have come out in relatively recent months—the review from the Social Policy Research Centre which the government commissioned; and the ANAO report about the implementation of income management?

Mr Gooda: I think the main thing that comes from them—and I cannot recall which report it was—was the cost of it, and these are the concerns I think we all raised at the beginning of income management. The government's own estimation, in the outward estimates, was $400 million to administer the scheme, which is sometimes a quarter of the money being paid in benefits to the participants. At the time, we made the argument that $400 million could be spent on a whole lot of other services, rather than just on administering people's income. I am not pleased, but it is almost satisfying to see that those figures have now been confirmed by those reports.

Senator PRATT: How is the recruitment of the new Race Discrimination Commissioner going?

Prof. Triggs: I understand it is going well. The closing date has passed and we have a number of applicants. There was a significant level of interest, with many inquiries and at least a satisfactory number of people applying. My hope is that the process will go forward reasonably speedily and that the Attorney will be able to make an appointment in due course.

Senator PRATT: Are there thoughts about the priorities for that commissioner? Will it continue in the same vein? Are there preliminary thoughts that might recast the role, or will you wait till there is an appointment?

Prof. Triggs: As you will know, the former commissioner, Helen Szoke, created the strategy in partnership with government bodies. That was a very important achievement over her appointment. Our task now, and something that I am trying to move along myself, as Acting Race Discrimination Commissioner, is to build the programs on that framework. In particular, we are very interested in social media and racism, but at the same time I do not want to dictate to the new commissioner exactly what we would see as the priorities. What I am trying to do in the commission is to create a more integrated or horizontal range of projects that would engage more than one commissioner. By looking at social internet and racism it would include social justice, race issues generally, Indigenous issues and children—

Senator PRATT: There is a lot of homophobia on the internet also, if we get round to passing the new antidiscrimination bill.

Prof. Triggs: Indeed. We are very much looking forward to that appointment being made.

Senator PRATT: Regarding the Children's Commissioner, the legislation has clearly been passed, so what is the progress now towards the appointment of a commissioner?

Prof. Triggs: My understanding is that a media release and the Attorney's appointment will be announced in the next few days. The new commissioner will take up their position within a few weeks. We hope then that they will have the opportunity to develop a program and strategies.

Senator PRATT: Terrific. It is good that we can look forward to that. I have a question for Mr Innes, noting that it is the 20th anniversary of the Disability Discrimination Act this year. I am wondering what milestones might be commemorated or what activities you might be looking to around that?

Mr Innes: For some time the commission has been planning a project called Twenty Years: Twenty Stories, which we are conducting in partnership with the Sydney Community Foundation and other benevolent organisations. It is the making of 20 short films, funded through corporate contributions and through contributions through the benevolent sector, telling 20 stories of how people with a disability have used the DDA as a tool not only to change their lives but also to change the lives of many others in the disability community.

Those stories will be launched by Her Excellency the Governor-General on 1 March at Admiralty House—1 March being the date 20 years ago when the Disability Discrimination Act commenced operation. In my area of the commission there is a great deal of excitement at the moment, leading up to the sharing of those stories with the broader community. We want to do two things with those stories. One is to encourage more people with disability to use the tool that the DDA provides to address discrimination and the other is to draw to the attention of the wider community the issues which impact on people with disability and how many of the barriers that people with a disability face are actually barriers in the community that can be removed.

Senator PRATT: Mr Gooda, I note that the Human Rights Commission has been doing some work on constitutional recognition for Indigenous Australians, and I am interested in getting an update from you on how you think it is going.

Mr Gooda: Tomorrow marks a great day. The act of recognition, we think, will pass through parliament. Our aim is to make sure that it passes unanimously. I think it will send a great message to the community if our political leaders can agree. I note the opposition leader in his response to the Prime Minister's report on Closing the Gap expressed the same hope. That is the big thing in front of us at the moment. As we say, the act of recognition does a few things. Because it has a sunset clause of two years, it starts to set a timeframe for when the referendum should be held. Otherwise, in two years' time the recognition given by the parliament would lapse. I do not think any of us want to see that happen. It does a few things, but, importantly, it sends a message to the community that at the highest level of politics there is bipartisan support on this matter.

Senator PRATT: In a sense the hard work starts now—ensuring that there is community support for the referendum. Do you have a view of how to progress that?

Mr Gooda: The Human Rights Commission is part of a reference committee that works with the You Me Unity people under the banner of Reconciliation Australia. They have been given $10 million by the government to go out and build that support in the community. We play a pretty active role in that committee. As well, each commissioner mentions the referendum whenever they get the opportunity. I certainly mention it in every speech and every presentation I make.

Senator PRATT: To follow up a few of Senator Siewert's questions about alcohol restrictions, I was struck by what you said, Mr Gooda, about the differences between the Northern Territory and other jurisdictions. As a West Australian it seems to me that we lack a national debate on these issues. It homes in on the Northern Territory when the capacity for Indigenous communities to have input on these issues is a national question. Do you have any thoughts about that?

Mr Gooda: Absolutely. I think we are forever promoting the UN Declaration on the Rights of Indigenous Peoples. We have some principles, one of the most important of which is the right to participate in decisions that affect you. I think we concentrate on the Northern Territory because the intervention happened there and the federal government has powers that it can enact in the Northern Territory, as opposed to Queensland or Western Australia.

I have written extensively about Fitzroy Crossing. I have mentioned at other Senate hearings the power of the women of Fitzroy Crossing who agitated for their own alcohol restrictions. By any evaluation you will find places have a more effective alcohol management regime when they are not imposed. We argue that if Aboriginal people—the most vulnerable people in the community, like the women, the children, the elderly people—are given the opportunity to have input into what they want in their communities, we will end up with the results that we are seeing in Fitzroy Crossing.

But I think there is another issue here that we are missing out on. We are concentrating on Aboriginal communities here. I live in Surry Hills. The debate is happening in Kings Cross around alcohol and violence after that young fella got killed—it is happening everywhere.

Mr Gooda: I think we paint Aboriginal people as the only people involved here, when we just impose these things on Aboriginal communities—when, in fact, we have whole communities in general in Australia, stepping up and saying, 'We've got to do something about alcohol.' I think the same thing is happening in our communities.

Senator PRATT: Yes, I think you are right. In that context, would it concern you that there was a community in WA, that is quite close to a town, advocating for alcohol restrictions but it was knocked back by the state government because they were concerned that any decision to restrict alcohol in that community would create a problem somewhere else—without any attempt, really, to work with that community to actually give them a program to manage those issues and have some autonomy in how to implement it and avoid those kinds of problems. Would something like that concern you?

Mr Gooda: Absolutely, and it is not only in WA. After we saw the issues in Toomala last year I was told by people there that they wanted to stop the publican selling ice blocks, because kids were getting used to going to a pub—and they were told they could not stop that. I cannot see how that is possible. Again, if the government is concerned about the impact on a mainstream town, I would suggest they go to Fitzroy Crossing and have a look there and see how that has been impacted—because those restrictions apply to everyone in Fitzroy Crossing: it is not an Aboriginal community; it is a mainstream town.

Senator PRATT: Yes, it is good. I have enjoyed a beer at the Fitzroy Crossing pub and it is all very orderly. It is terrific.

Mr Gooda: I drove in there on a Friday night at dusk—and anyone having experienced driving into those places at that time of the night and week will know they can be pretty rowdy places—and I was immediately struck by how quiet everything was. And it just continued that way into the Friday night.

Senator PRATT: Thank you, Mr Gooda. I have a brief question for Ms Broderick. I know you have been doing some work on valuing the work of unpaid carers and improving the rights of people in those roles. I note also there was a decision by the government yesterday in relation to the right to negotiate for work purposes. I am just interested in an update on those issues from your perspective.

Ms Broderick: Thank you, Senator. You are right: we released, about two weeks ago, a major report into recognising and valuing those who care. We worked with the Social Research Policy Centre. A leading academic Bettina Cass led that research, with a number of academics. It was really to look at the gender gap in retirement savings and to look at the contribution that unpaid carers made to Australia. We made a number of recommendations as a result of that, one of which was an extension of the right to request to extend beyond caring for children of under-school age and a child with a disability up to 18.

But there were a number of other recommendations that we made. We looked at 24 countries around the world—18 OECD countries and about six others—to look at what policy solutions they had to caring and valuing unpaid caring work.

Senator PRATT: It was put to me yesterday that these policies are ill-conceived and not really thought about, and part of some vague plan; but it would strike me that that work clearly has been done.

Ms Broderick: That is right. A lot of the policy focus at the moment is on mothers with young children, and what this research sought to point out is that caring happens across the life cycle. There is one area where men's care equals women's, and that is in caring for a partner later on in life. So we were looking at what government and employer supports, workplace mechanisms and a whole range of things could be put in place to ensure that people can be engaged in paid work and care.